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What changed in Colgate-Palmolive's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Colgate-Palmolive's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+327 added−346 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in Colgate-Palmolive's 2024 10-K

327 paragraphs added · 346 removed · 276 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeUnderlying these values and our strong culture is the commitment of all Colgate people to maintain the highest ethical standards and demonstrate ethical leadership, including compliance with Colgate policies and our Code of Conduct. 3 WE ARE CARING: We are united in making the world a better place. We believe everyone deserves a healthier life.
Biggest changeBy encouraging Colgate people to be more caring, inclusive and courageous every day, our goal is to create a healthier future for ourselves and others. Underlying these values and our strong culture is the commitment of all Colgate people to maintain the highest ethical standards and demonstrate ethical leadership, including compliance with Colgate policies and our Code of Conduct.
Food and Drug Administration, the Federal Trade Commission, the Consumer Product Safety Commission, the Occupational, Health and Safety Administration and the Environmental Protection Agency, regulate different aspects of our business, along with parallel authorities at the state and local levels and comparable authorities overseas.
Food and Drug Administration, the Federal Trade Commission, the Consumer Product Safety Commission, the Occupational, Safety and Health Administration and the Environmental Protection Agency, regulate different aspects of our business, along with parallel authorities at the state and local levels and comparable authorities overseas.
Geographically, Oral Care is a substantial part of our business in Asia Pacific. Through our Hill’s Pet Nutrition segment (“Hill’s” or “Pet Nutrition”), we are a world leader in specialty pet nutrition products for dogs and cats with products marketed in over 80 countries and territories worldwide. Hill’s markets pet foods primarily under two brands.
Geographically, Oral Care is a substantial part of our business in Asia Pacific. Through our Hill’s Pet Nutrition segment (“Hill’s” or “Pet Nutrition”), we are a leader in specialty pet nutrition products for dogs and cats with products marketed in over 80 countries and territories worldwide. Hill’s markets pet foods primarily under two brands.
At Colgate, we are proud of our collaborative spirit - what we call The Power of WE. Colgate people, working around the world, share a commitment to our three corporate values: We are Caring, We are Inclusive and We are Courageous.
At Colgate, we are proud of our collaborative spirit - what we call The Power of WE. 3 Colgate people, working around the world, share a commitment to our three corporate values - We are Caring, We are Inclusive and We are Courageous.
For information regarding the impact of the war in Ukraine, refer to Part II, Item 7 “Management’s Discussions and Analysis of Financial Condition and Results of Operations - Executive Overview.” Human Capital Management Human capital matters at Colgate are managed by our Global Human Resources function, led by our Chief Human Resources Officer, with oversight from the Personnel and Organization Committee of our Board of Directors (the “Board”).
For information regarding the impact of the war in Ukraine, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Executive Overview.” Human Capital Management Human capital matters at Colgate are managed by our Global Human Resources function, led by our Chief Human Resources Officer, with oversight from the Personnel and Organization Committee of our Board of Directors (the “Board”).
For additional information regarding market share data, see “ Market Share Information ” in Part II, Item 7 of this report. 1 Distribution; Raw Materials; Competition; Trademarks and Patents Our Oral, Personal and Home Care products are sold to a variety of traditional and eCommerce retailers, wholesalers and distributors worldwide.
For additional information regarding market share data, see “ Market Share Information ” in Part II, Item 7 of this report. 1 Distribution; Raw Materials; Competition; Trademarks and Patents Our Oral, Personal and Home Care products are sold to a variety of retailers, wholesalers and distributors worldwide.
Hill’s Science Diet, which is called Hill’s Science Plan in Europe, is a range of products for everyday nutritional needs. Hill’s Prescription Diet is a range of therapeutic pet foods to help nutritionally support dogs and cats in different stages of health. Sales of Pet Nutrition products accounted for 22% of our total worldwide Net sales in 2023.
Hill’s Science Diet, which is called Hill’s Science Plan in Europe, is a range of products for everyday nutritional needs. Hill’s Prescription Diet is a range of therapeutic pet foods to help nutritionally support dogs and cats in different stages of health. Sales of Pet Nutrition products accounted for 22% of our total worldwide Net sales in 2024.
Pet Nutrition products are sold by authorized pet supply retailers, veterinarians and eCommerce retailers. Certain of our products are also sold direct-to-consumer. Our sales to Walmart, Inc. and its affiliates represented approximately 11% of our Net sales in 2023. No other customer represented more than 10% of our Net sales.
Pet Nutrition products are sold by authorized pet supply retailers, veterinarians and eCommerce retailers. Certain of our products are also sold direct-to-consumer. Our sales to Walmart, Inc. and its affiliates represented approximately 11% of our Net sales in 2024. No other customer represented more than 10% of our Net sales in 2024.
Malcolm 56 2022 Executive Vice President and Controller Each of our executive officers listed above has served the Company or our subsidiaries in various executive capacities for the past five years with the exception of Stanley J. Sutula III, Chief Financial Officer. Prior to joining the Company, Mr.
Malcolm 57 2022 Executive Vice President, Controller Each of our executive officers listed above has served the Company or our subsidiaries in various executive capacities for the past five years with the exception of Stanley J. Sutula III, Chief Financial Officer. Prior to joining the Company, Mr.
For more information regarding our worldwide Net sales by product category, refer to Note 1, Nature of Operations and Note 14, Segment Information to the Consolidated Financial Statements.
For more information regarding our worldwide Net sales by product category, refer to Note 1, Nature of Operations and Note 13, Segment Information to the Consolidated Financial Statements.
Approximately 34% of our employees are based in Asia Pacific, 30% are based in Latin America, 14% are based in Europe, 17% are based in North America and 5% are based in Africa/Eurasia. Our global workforce covers a broad range of functions, from manufacturing employees to management personnel and certain of our employees are represented by unions or works councils.
Approximately 33% of our employees are based in Asia Pacific, 30% are based in Latin America, 17% are based in North America, 15% are based in Europe and 5% are based in Africa/Eurasia. Our global workforce covers a broad range of functions, from manufacturing employees to management personnel and certain of our employees are represented by unions or works councils.
As of December 31, 2023, we had approximately 34,000 employees based in over 100 countries. Approximately two-thirds of our revenues are generated from markets outside the U.S. and 84% of our employees are located outside the U.S.
As of December 31, 2024, we had approximately 34,000 employees based in over 100 countries. Approximately two-thirds of our revenues are generated from markets outside the U.S. and over 80% of our employees are located outside the U.S.
We manufacture and market a wide array of products for the Home Care market, including Ajax, Axion and Palmolive dishwashing liquids, Ajax, Fabuloso and Murphy household cleaners and Suavitel, Soupline, Fluffy and Cuddly fabric conditioners. Sales of Oral, Personal and Home Care products accounted for 42%, 19% and 17%, respectively, of our total worldwide Net sales in 2023.
We manufacture and market a wide array of products for the Home Care market, including Ajax, Axion and Palmolive dishwashing liquids, Ajax, Fabuloso and Murphy household cleaners and Suavitel, Soupline, Fluffy and Cuddly fabric conditioners. Sales of Oral, Personal and Home Care products accounted for 43%, 18% and 17%, respectively, of our total worldwide Net sales in 2024.
Lead with Zero Waste Facilities: It is our goal to achieve TRUE certification for zero waste at 100% of our operations, which we define as our manufacturing facilities, owned and operated warehouses, global technology centers and strategic 5 offices, by 2025. In 2023, four more of our sites achieved TRUE certification.
Lead with Zero Waste Facilities : Our goal is to achieve TRUE certification for zero waste at 100% of our operations, which we define as our manufacturing facilities, owned and operated warehouses, global technology centers and strategic offices, by 2025. In 2024, eight more of our sites achieved TRUE certification.
Our 2025 Sustainability & Social Impact Strategy is focused on three key ambitions - preserving our environment by accelerating action on climate change and reducing our environmental footprint; helping millions of homes by empowering people to develop healthier habits; and driving social impact with a commitment to helping to ensure the well-being of all people and their pets.
Our 2025 Sustainability & Social Impact Strategy is focused on three key ambitions - preserving our environment by accelerating action on climate change and reducing our environmental footprint; helping millions of homes by designing more sustainable products and empowering people to develop healthier habits; and driving social impact with a commitment to helping to ensure the wellbeing of all people and their pets.
To support our target to become Net Zero carbon in our operations by 2040, we have built a global renewable energy master plan which includes roadmaps by division to cover our manufacturing facilities and owned warehouses, global technology centers and offices. Renewable energy agreements are a valuable part of this renewable energy master plan.
To support our target to become Net Zero carbon in our operations by 2040, we have built a global renewable energy master plan which includes roadmaps by division to cover our manufacturing facilities and owned warehouses, global technology centers and offices.
We do this by developing and selling science-led products globally that make people’s and their pets’ lives healthier and more enjoyable and by embracing our sustainability and social impact and diversity, equity and inclusion (“DE&I”) strategies across our organization. Our products are marketed in over 200 countries and territories throughout the world.
We do this by developing and selling science-led products globally that make people’s and their pets’ lives healthier and more enjoyable and by embracing our Sustainability & Social Impact Strategy across our organization. Our products are marketed in over 200 countries and territories throughout the world.
The retail landscape in many of our markets continues to evolve as a result of the continued growth of eCommerce, changing consumer behavior and preferences (as consumers increasingly shop online and via mobile and social applications) and the increased presence of alternative retail channels, such as subscription services and direct-to-consumer businesses.
The retail landscape in many of our markets continues to evolve as a result of the continued growth of eCommerce, changing consumer behavior and preferences (as consumers increasingly shop online, including to compare prices and product availability) and the increased presence of alternative retail channels, such as subscription services and direct-to-consumer businesses.
That brings the total number of TRUE certified sites to 36 across five continents in 21 countries, as of December 31, 2023. Social Impact: Colgate Bright Smiles, Bright Futures is our flagship oral health education and well-being initiative. Since the program was established in 1991, we have reached approximately 1.7 billion children and their families in more than 100 countries.
That brings the total number of TRUE certified sites to 44 across six continents in 26 countries, as of December 31, 2024. Social Impact : Colgate Bright Smiles, Bright Futures is our flagship oral health education and well-being initiative. Since the program was established in 1991, we have reached approximately 1.8 billion children and their families with oral health education.
We are also focused on working with recycling stakeholders and partnering with key third parties to drive tube acceptance and communicating that consumers should check with their local facilities to see if they accept the tubes for recycling.
We are also focused on working with recycling stakeholders and partnering with key third parties to drive tube acceptance and communicating that consumers should check with their local recycling facilities to confirm tube acceptance.
It is our policy and practice to comply with all government regulations applicable to our business. In 2023, compliance with these regulations did not have, and we do not expect such compliance in the future to have, a material adverse effect on our capital expenditures, earnings or competitive position.
In 2024, compliance with these regulations did not have, and we do not expect such compliance in the future to have, a material adverse effect on our capital expenditures, earnings or competitive position.
Colgate’s Culture and Core Values Colgate’s purpose is to reimagine a healthier future for all people, their pets and our planet. We believe Colgate people are crucial to our ongoing business success and aim to recruit, develop and retain strong and diverse talent. We celebrate differences, promote an equitable and inclusive environment and value the contributions of all Colgate people.
Colgate’s Culture and Core Values Colgate’s purpose is to reimagine a healthier future for all people, their pets and our planet. We believe Colgate people are crucial to our ongoing business success and aim to recruit, develop and retain strong talent with diverse backgrounds and perspectives.
These ambitions are supported by actionable targets consistent with our continued commitment to building environmental and social consciousness into our decision-making. In 2023, we made progress on the targets set forth in our 2025 Sustainability & Social Impact Strategy.
These ambitions are supported by actionable targets consistent with our continued commitment to building environmental and social consciousness into our decision-making. In 2024, we made progress on the targets set forth in our 2025 Sustainability & Social Impact Strategy. Reduce Plastic Waste : We continue to implement our first-of-its-kind recyclable toothpaste tube across our toothpaste portfolio.
Accelerate Action on Climate Change: We are taking steps to accelerate action on climate change through science-based near-term, long-term and Net Zero 2040 emissions targets across our operations and supply chain, which have been approved by The Science Based Targets initiative.
We are working towards this target with product design changes and by increasing recycled content in our packaging. 4 Accelerate Action on Climate Change : We are taking steps to accelerate action on climate change through science-based near-term, long-term and Net Zero 2040 emissions targets across our operations and value chain, which have been approved by The Science Based Targets initiative.
We also remain committed to reducing our use of new (virgin) plastic across our portfolio and continue to make progress toward our target to reduce new (virgin) plastic by one-third versus 2019. We are working towards this target with product design changes and by increasing recycled content in our packaging.
We also remain committed to reducing our use of new (virgin) plastic across our portfolio and continue to make progress toward our target to reduce new (virgin) plastic by one-third versus 2019.
Daniels 60 2014 Chief Legal Officer and Secretary John W. Kooyman 59 2019 Chief of Staff Prabha Parameswaran 65 2019 Group President, Growth and Strategy Panagiotis Tsourapas 59 2019 Group President, Europe and Developing Markets Sally Massey 50 2020 Chief Human Resources Officer Gregory O.
Sutula III 59 2020 Chief Financial Officer Jennifer M. Daniels 61 2014 Chief Legal Officer and Secretary Prabha Parameswaran 66 2019 Group President, Growth and Strategy Panagiotis Tsourapas 60 2019 Group President, Europe and Developing Markets Sally Massey 51 2020 Chief Human Resources Officer Gregory O.
We seek to deliver sustainable, profitable growth and superior shareholder returns, as well as provide Colgate people with an innovative and inclusive work environment.
We seek to deliver consistent compounded earnings per share growth to help drive superior total shareholder return, as well as to provide Colgate people with an innovative and inclusive work environment.
We view compensation as an important tool to motivate leaders at all levels of the organization. For information regarding our compensation philosophy and executive compensation programs, please see our Proxy Statement to be filed with the United States Securities and Exchange Commission (the “SEC”) in connection with the 2024 Annual Meeting of Stockholders.
For information regarding our compensation philosophy and executive compensation programs, please see our Proxy Statement to be filed with the United States Securities and Exchange Commission (the “SEC”) in connection with the 2025 Annual Meeting of Stockholders. Sustainability and Social Impact Sustainability is critically important to our overall business and growth strategy.
As part of the succession planning process, we review and discuss potential successors to key positions and examine backgrounds, capabilities and appropriate developmental assignments. Compensation Philosophy Given the importance of Colgate people to our business success, motivating and retaining critical talent is a key focus.
Our Board is also extensively involved in succession planning and people development, with special focus on CEO succession. As part of the succession planning process, we review and discuss potential successors to key positions and examine backgrounds, capabilities and appropriate developmental assignments.
In this section, “people managers” refers to employees with roles that have at least one direct report, “executives” refers to those employees who are eligible to participate in Colgate’s equity incentive compensation plans and “senior leadership” refers to employees who are Senior Vice Presidents and above.
In this section, “executives” refers to those employees who are eligible to participate in Colgate’s equity incentive compensation plans and “senior leadership” refers to employees who are Senior Vice Presidents and above. Succession Planning We have a rigorous succession planning process, led by our Global Human Resources function.
References to these reports and our website are for informational purposes only and neither the reports nor the other information on our website is incorporated by reference into this Annual Report on Form 10-K.
References to these reports and our website are for informational purposes only and neither the reports nor the other information on our website is incorporated by reference into this Annual Report on Form 10-K. 5 Information about our Executive Officers The following is a list of our executive officers as of February 13, 2025: Name Age Date First Elected Executive Officer Present Title Noel Wallace 60 2009 Chairman of the Board, President and Chief Executive Officer Stanley J.
Additional information about our sustainability targets and efforts, including our 2022 Sustainability and Social Impact Report, our 2023 Climate Transition & Net Zero Action Plan and our reports aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and Sustainability Accounting Standards Board (SASB) can be found in the Sustainability section of our website at https://www.colgatepalmolive.com/sustainability.
Through our Hill’s Food, Shelter & Love program, we have helped over 15 million shelter pets find forever homes since 2002. Additional information about our sustainability targets and efforts, including our 2023 Sustainability & Social Impact Report and our 2024 Climate Transition & Net Zero Action Plan can be found in the Sustainability section of our website at https://www.colgatepalmolive.com/sustainability.
We continue to share the tube technology with third parties by holding approximately 80 sessions to encourage recyclability of all tubes in practice and at scale.
We introduced this tube in 2019 and, as of December 31, 2024, we have transitioned approximately 75% of our toothpaste SKUs globally and approximately 95% of our toothpaste SKUs in North America to recyclable tubes. We continue to share the tube technology with third parties and work to encourage recyclability of all tubes in practice and at scale.
Through our continuous learning program, our employees have the opportunity to enhance their knowledge of data analytics and digital skills. We are also committed to listening to our employees and seeing how the company is evolving and growing through regular employee engagement surveys.
We are also committed to listening to our employees and seeing how the company is evolving and growing through regular employee engagement surveys. As a truly global company, with employees in over 100 countries, it is important that our employees reflect the communities in which we live and work.
We recognize that to grow and thrive we must build on the power of our legacy, our scale and reach for good and for all. We are committed to getting better every day in all that we do, as individuals and as teams.
We are committed to getting better every day in all that we do, as individuals and as teams. We seek to foster an inclusive and supportive workplace that promotes the growth and development of all employees, supported by a robust learning culture that aligns with our business needs.
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These evolved values, which were reimagined in 2023, represent who we are and inspire Colgate people to carry Colgate forward into the future. By encouraging Colgate people to be more caring, inclusive and courageous every day, our goal is to create a healthier future for ourselves and others.
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We are also subject to laws and regulations relating to sustainability, labor and employment practices, artificial intelligence and taxation. It is our policy and practice to comply with all government regulations applicable to our business.
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We lead with empathy, respect and gratitude. We act with integrity, doing things the right way, for the right reasons no matter what. We support others by generously sharing our resources and talents. We work every day to earn the trust of all of our stakeholders.
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As the owner of the world’s most penetrated brand, our business success relies on our ability to market our brands to consumers around the world. We believe having a workforce that can speak to our consumers in an authentic manner enables us to increase our household penetration, an important part of our business strategy.
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WE ARE INCLUSIVE: We create a sense of belonging for all and cultivate an environment where people can be their authentic selves. We foster a culture of belonging where Colgate people feel valued, part of a global team, and empowered to do extraordinary things.
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We are committed to fostering a sense of belonging that embodies our purpose and values, which are essential to how we drive innovation and growth. We celebrate differences, emphasize the importance of inclusion and belonging for everyone and value the contributions of all Colgate people.
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We design the best solutions by embracing the unique talents, perspectives and backgrounds of our diverse workforce. We form the strongest teams and create powerful pathways for our people and communities, to break through everyday barriers to equality of opportunity. WE ARE COURAGEOUS: We drive change and get things done.
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As of December 31, 2024, our global workforce was approximately 58% male and 42% female. Women represented approximately 46% of Colgate’s executives and 35% of senior leadership. In the U.S., approximately 33% of our employees self-identify as racial/ethnic minorities, approximately 45% of our executives self-identify as racial/ethnic minorities and approximately 39% of our senior leadership self-identify as racial/ethnic minorities.
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We are infinitely curious, constantly searching for better ways of working. We challenge each other and how we do things, unafraid to disrupt the status quo, boldly and intentionally innovating, exploring and reaching for what is possible.
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Compensation Philosophy Given the importance of Colgate people to our business success, motivating and retaining critical talent is a key focus. We view compensation as an important tool to motivate leaders at all levels of the organization.
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We continue to drive a learning culture and transform our learning strategy to better meet our evolving business needs. We provide our employees with learning experiences focused on building leadership skills and offer training programs that are closely aligned with our business strategy. We continue to embed digital capabilities across the organization.
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Renewable energy agreements are a valuable part of this renewable energy master plan and are key contributors to achieving our target to have 100% renewable electricity by 2030. As part of these efforts, in 2023 and 2024, we signed long-term virtual power purchase agreements in the United States and Europe, respectively.
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We also recently launched a new leadership framework anchored in three core principles: cultivate trust, create the future and commit to impact. We believe these principles serve as a foundation to guide our ongoing transformation by defining the behaviors that Colgate people need to model.
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Diversity, Equity & Inclusion As a truly global company, it is important that our employees reflect the diversity of the communities in which we live and work. As of December 31, 2023, our global workforce was approximately 59% male and 41% female.
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Women represented approximately 54% of our salaried and clerical employees, 46% of our people managers, 45% of Colgate’s executives and 38% of senior leadership. Measuring the race/ethnicity of our workforce is challenging to do on a global basis.
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In the U.S., on an employee self-reported basis, the racial/ethnic composition of our workforce was approximately 67% White, 12% Hispanic, 10% Black, 9% Asian and 2% Other.
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The racial/ethnic composition of our people managers was approximately 61% White, 16% Hispanic, 14% Asian and 9% Black; the composition of our executives was approximately 56% White, 20% Hispanic, 16% Asian, 7% Black and 1% Other; and the composition of senior leadership was approximately 59% White, 17% Hispanic, 12% Asian and 12% Black.
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“Other” refers to American Indian/Alaska Native, two or more races or Native Hawaiian/other Pacific Islander.
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We are committed to providing all of our employees with an equitable and inclusive work environment, learning opportunities and promotion and growth opportunities. A vital piece of our DE&I strategy has been ensuring that our succession planning process incorporates the equal opportunity for advancement of women and people from underrepresented communities.
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To help further foster inclusiveness, we support employee resource groups for team members of many different identities, interests and backgrounds, including underrepresented communities. Each of these resource groups contributes to our inclusive work environment by developing and implementing programs to promote business and community involvement as well as cultural awareness.
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We also partner with external organizations to develop an inclusive and supportive work environment. Our global DE&I strategy aims to further advance our commitment to become an even more diverse, equitable and inclusive organization through its four pillars of People, Community, Supplier Diversity and Communication.
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Consistent with this strategy, we are working to implement policies, learning experiences and processes that promote awareness, 4 empathy, advocacy and opportunity; become an ally for positive change for the underserved in communities in which we live and work; support minority and women-owned suppliers to enable success of diversity-owned businesses; and promote dialogue around DE&I to increase awareness and advance the culture change to achieve our vision.
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Our Board, through its Nominating, Governance and Corporate Responsibility Committee and Personnel and Organization Committee, receives regular updates from management on our DE&I efforts. Succession Planning We have a rigorous succession planning process, led by our Global Human Resources function. Our Board is also extensively involved in succession planning and people development with special focus on CEO succession.
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Sustainability and Social Impact Sustainability is critically important to our overall business and growth strategy.
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Reduce Plastic Waste: As a positive step toward achieving our target to make all of our packaging recyclable, reusable or compostable by 2025, we continue to implement our first-of-its-kind recyclable toothpaste tube across our toothpaste portfolio.
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We introduced this tube in 2019 and, as of December 31, 2023, we have transitioned approximately 60% of our toothpaste SKUs globally and approximately 90% of our toothpaste SKUs in North America to it. The recyclable toothpaste tube is now available in over 50 countries worldwide.
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In 2023, we signed a long-term virtual power purchase agreement for a solar energy farm outside of Waco, Texas, which will be a long-term source of clean, renewable energy in the United States. Upon completion, the solar farm is expected to produce the equivalent of 100% of our U.S.-based operational electricity needs.
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Through our Hill’s Food, Shelter & Love program, we have helped over 14 million shelter pets find forever homes since 2002.
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Information about our Executive Officers The following is a list of our executive officers as of February 15, 2024: Name Age Date First Elected Executive Officer Present Title Noel R. Wallace 59 2009 Chairman of the Board, President and Chief Executive Officer Stanley J. Sutula III 58 2020 Chief Financial Officer Jennifer M.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile geographic diversity helps to reduce our exposure to risks in any one country or part of the world, it also means that we face risks associated with significant international operations, including, but not limited to: • changing macroeconomic conditions in our markets, including as a result of inflationary pressure, the war in Ukraine, the Israel-Hamas war, volatile commodity prices and increases and/or volatility in the cost of raw and packaging materials, labor, energy and logistics; • political instability or uncertainty, including as a result of elections, economic instability, geopolitical events and tensions, wars and military conflicts, such as the war in Ukraine, the Israel-Hamas war and tensions between China and Taiwan; • environmental events, widespread health emergencies, such as pandemics or epidemics, natural disasters or social or labor unrest; • changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of revenues, profits and cash flows from non-U.S. markets or increase our supply costs, as measured in U.S. dollars, in those markets; • exchange controls and other limits on our ability to import or export raw materials or finished product, including as a result of the war in Ukraine and the Israel-Hamas war, or to repatriate earnings from overseas; • lack of well-established, reliable and/or impartial legal systems in certain countries where we operate and difficulties in enforcing contractual, intellectual property or other legal rights; • foreign ownership and investment restrictions and the potential for nationalization or expropriation of property or other resources; and • changes to trade policies and agreements and other foreign or domestic legal and regulatory requirements, including those resulting in potentially adverse tax consequences or the imposition of and/or the increase in trade restrictions and/or tariffs, sanctions, price controls, labor laws, travel or immigration restrictions (including as a result of pandemics, epidemics or other widespread health emergencies), profit controls or other government controls, including as a result of the war in Ukraine and the Israel-Hamas war.
Biggest changeWhile geographic diversity helps to reduce our exposure to risks in any one country or part of the world, it also means that we face risks associated with significant international operations, including, but not limited to: • changing macroeconomic conditions in our markets, including as a result of inflationary pressure, economic slowdown or recession, the war in Ukraine, the conflict in the Middle East, major developments in trade relations, volatile commodity prices and increases and/or volatility in the cost of raw and packaging materials, labor, energy and logistics; • changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of revenues, profits and cash flows from non-U.S. markets or increase our supply costs, as measured in U.S. dollars, in those markets; • political instability or uncertainty, including as a result of elections, economic instability, geopolitical events and tensions, wars and military conflicts, such as the war in Ukraine, the conflict in the Middle East and tensions between China and Taiwan; • changes to trade policies and agreements and other foreign or domestic legal and regulatory requirements, including those resulting in potentially adverse tax consequences or the imposition of and/or the increase in trade restrictions and/or tariffs, sanctions, price controls, labor laws, travel or immigration restrictions, profit controls or other government controls, including as a result of the war in Ukraine, conflict in the Middle East and tensions between China and Taiwan; • environmental events, widespread health emergencies, such as pandemics or epidemics, natural disasters or social or labor unrest; • exchange controls and other limits on our ability to import or export raw materials or finished product, including as a result of the war in Ukraine and the conflict in the Middle East, or to repatriate earnings from overseas; • lack of well-established, reliable and/or impartial legal systems in certain countries where we operate and difficulties in enforcing contractual, intellectual property or other legal rights; and • foreign ownership and investment restrictions and the potential for nationalization or expropriation of property or other resources.
Our ability to launch new products, to sustain existing products and to expand into adjacent categories, channels of distribution or geographies is affected by whether we can successfully: • identify, develop and fund technological innovations; • obtain and maintain necessary intellectual property protection and avoid infringing intellectual property rights of others; 9 • obtain approvals and registrations of regulated products, including from the FDA and other regulatory bodies in the U.S. and abroad; and • anticipate and quickly respond to the needs and preferences of consumers and customers.
Our ability to launch new products, to sustain existing products and to expand into adjacent categories, channels of distribution or geographies is affected by whether we can successfully: • identify, develop and fund technological innovations; 9 • obtain and maintain necessary intellectual property protection and avoid infringing intellectual property rights of others; • obtain approvals and registrations of regulated products, including from the FDA and other regulatory bodies in the U.S. and abroad; and • anticipate and quickly respond to the needs and preferences of consumers and customers.
Any failure to achieve our sustainability and social impact targets or the perception (whether or not valid) that we have failed to act responsibly with respect to such matters or to effectively respond to new or additional legal or regulatory requirements regarding climate change or other sustainability matters, could result in adverse publicity and increased litigation risk and adversely affect our business and reputation.
Failure to achieve our sustainability and social impact targets or the perception (whether or not valid) that we have failed to act responsibly with respect to such matters or to effectively respond to new or additional legal or regulatory requirements regarding climate change or other sustainability matters, could result in adverse publicity and increased litigation risk and adversely affect our business and reputation.
Our uses of these systems include, but are not limited to: • communicating within our company and with other parties, including our customers and consumers; • ordering and managing materials from suppliers; • converting materials to finished products; • receiving and processing orders from, shipping products to and invoicing our customers and consumers; 14 • marketing products to consumers; • collecting, storing, transferring and/or processing customer, consumer, employee, vendor, investor and other stakeholder information and personal data, including, but not limited to, such data from residents of states, countries and regions with important data protection laws and regulations; • processing transactions, including but not limited to employee payroll, employee and retiree benefits and payments to customers and vendors; • hosting, processing and sharing confidential and proprietary research, intellectual property, business plans and financial information; • summarizing and reporting results of operations, including financial reporting; • managing our banking and other cash liquidity systems and platforms; • complying with legal, regulatory and tax requirements; • providing data security; and • handling other processes involved in managing our business.
Our uses of these systems include, but are not limited to: • communicating within our company and with other parties, including our customers, suppliers and consumers; • ordering and managing materials from suppliers; • converting materials to finished products; • receiving and processing orders from, shipping products to and invoicing our customers, suppliers and consumers; • marketing products to consumers; 14 • collecting, storing, transferring and/or processing customer, consumer, employee, vendor, investor and other stakeholder information and personal data, including, but not limited to, such data from residents of states, countries and regions with comprehensive data protection laws and regulations; • processing transactions, including but not limited to employee payroll, employee and retiree benefits and payments to customers, suppliers and vendors; • hosting, processing and sharing confidential and proprietary research, intellectual property, business plans and financial information; • summarizing and reporting results of operations, including financial reporting; • managing our banking and other cash liquidity systems and platforms; • complying with legal, regulatory and tax requirements; • providing data security; and • handling other processes involved in managing our business.
Whether or not a legal claim or proceeding is successful, or a 17 withdrawal, recall or reformulation is required or advisable, such assertions could have an adverse effect on our business, results of operations, cash flows and financial condition, and the negative publicity surrounding them could harm our reputation and brand image.
Whether or not a legal claim or proceeding is successful, or a withdrawal, recall or reformulation is required or advisable, such assertions could have an adverse effect on our business, results of operations, cash flows and financial condition, and the negative publicity surrounding them could harm our reputation and brand image.
These divestitures may adversely impact our business, results of operations, cash flows and financial condition if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested brands or businesses, or otherwise achieve the anticipated benefits or cost savings from the divestitures.
These divestitures may adversely impact our business, results of operations, cash flows and financial condition if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested brands or businesses, or otherwise achieve the anticipated benefits or 12 cost savings from the divestitures.
Such cyberattacks and cyber incidents can take many forms, including cyber extortion, social engineering, password theft or introduction of viruses or malware, such as ransomware. In addition, the techniques used in cyberattacks and cyber incidents continue to evolve and develop, including through the use of emerging technologies, such as artificial intelligence.
Such cyberattacks and cyber incidents can take many forms, including cyber extortion, social engineering, password theft or introduction of viruses or malware, such as ransomware. In addition, the techniques used in cyberattacks and cyber incidents continue to evolve and develop, including through the use of existing and emerging technologies, such as artificial intelligence.
Food and Drug Administration (the “FDA”), the Federal Trade Commission, the Consumer Product Safety Commission, the Occupational Safety and Health Administration and the Environmental Protection Agency, regulate different aspects of our business, along with parallel authorities at the state and local levels and comparable authorities overseas.
Food and Drug Administration (the “FDA”), the Federal Trade 16 Commission, the Consumer Product Safety Commission, the Occupational Safety and Health Administration and the Environmental Protection Agency, regulate different aspects of our business, along with parallel authorities at the state and local levels and comparable authorities overseas.
Our ability to compete also depends on the strength of our brands and on our ability to enforce and defend our intellectual property, including patent, trademark, copyright, trade secret and trade dress rights, against infringement and legal challenges by competitors.
Our ability to compete also depends on the strength of our brands and products and on our ability to enforce and defend our intellectual property, including patent, trademark, copyright, trade secret and trade dress rights, against infringement and legal challenges by competitors.
Any of these risks could adversely impact our reputation and our business, results of operations, cash flows and financial condition. 12 We have divested and may in the future periodically divest brands or businesses.
Any of these risks could adversely impact our reputation and our business, results of operations, cash flows and financial condition. We have divested and may in the future periodically divest brands or businesses.
In addition, although we have policies and procedures in place to ensure that all personal information collected by us or our third-party service providers is securely maintained, data leakages due to human error or intentional or unintentional conduct have occurred and likely will continue to occur. Furthermore, we periodically upgrade our IT/OT Systems or adopt new technologies.
In addition, although we have policies and procedures in place to ensure that all personal information collected by us or our third-party service providers is securely maintained, data leakages due to human error or intentional or unintentional conduct have occurred and likely will occur again. Furthermore, we periodically upgrade our IT/OT Systems or adopt new technologies.
Our operations and those of our suppliers, contract manufacturers or logistics providers have been and may continue to be disrupted by a number of factors, including, but not limited to: • geopolitical events, wars and military conflicts, such as the war in Ukraine and the Israel-Hamas war; • widespread health emergencies, such as pandemics or epidemics; • strikes and other labor disputes; • disruptions in logistics; • loss or impairment of key manufacturing or distribution sites; • loss of key suppliers or contract manufacturers; • capacity constraints; • raw material and product availability and/or quality or safety issues; • industrial accidents or other occupational health and safety issues; • the impact on our suppliers of tighter credit or capital markets; • the lack of availability of qualified personnel, such as truck drivers and production labor; • governmental incentives, regulations and controls (including import and export restrictions, such as new or increased tariffs, sanctions, quotas or trade barriers); and • natural disasters, including climatic events (including any potential effects of climate change) and earthquakes, tornadoes, acts of war or terrorism, political unrest or uncertainty, fires or explosions, cybersecurity incidents and other external factors over which we have no control.
Our operations and those of our suppliers, contract manufacturers or logistics providers have been and may continue to be disrupted by a number of factors, including, but not limited to: • geopolitical events, wars and military conflicts, such as the war in Ukraine and the conflict in Middle East; • widespread health emergencies, such as pandemics or epidemics; • strikes and other labor disputes; • disruptions in logistics; • loss or impairment of key manufacturing or distribution sites; • loss of key suppliers or contract manufacturers; • capacity constraints; • raw material and product availability and/or quality or safety issues; • industrial accidents or other occupational health and safety issues; • the impact on our suppliers of tighter credit or capital markets; • the lack of availability of qualified personnel, such as truck drivers and production labor; • governmental incentives, regulations and controls (including import and export restrictions, such as new or increased tariffs, sanctions, quotas or trade barriers); and • natural disasters, including climatic events (including any potential effects of climate change) and earthquakes, tornadoes, acts of war or terrorism, political unrest or uncertainty, fires or explosions, cybersecurity incidents and other external factors over which we have no control.
As these and other tax laws and related regulations change, our business, results of operations, cash flows and financial condition could be materially impacted.
However, as these and other tax laws and related regulations change, our business, results of operations, cash flows and financial condition could be materially impacted.
In connection with the BEPS Project, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in countries outside of the U.S. Many jurisdictions have already enacted legislation and adopted policies 18 resulting from the BEPS Project.
In connection with the BEPS Project, companies are required to disclose more information to tax authorities and the public on operations around the world, which may lead to greater audit scrutiny of profits earned in countries outside of the U.S. Many jurisdictions have already enacted legislation and adopted policies resulting from the BEPS Project.
The success of our brands could also suffer if our marketing initiatives do not have the desired impact on a brand’s image or its ability to attract consumers. In addition, the legal, regulatory and ethics landscape around the use of artificial intelligence, including generative artificial intelligence, is rapidly evolving.
The success of our brands could also suffer if our marketing initiatives do not have the desired impact on a brand’s image or its ability to attract consumers. In addition, the legal, regulatory and ethics landscape around the use of artificial intelligence, including machine learning and generative artificial intelligence, is rapidly evolving.
In addition, the rapid evolution and increased adoption of emerging technologies, such as artificial intelligence, may intensify our cybersecurity risks.
In addition, the rapid evolution and increased adoption of existing and emerging technologies, such as artificial intelligence, may intensify our cybersecurity risks.
Such additional regulation may adversely affect our business, results of operations, cash flows and financial condition by increasing our compliance and manufacturing costs and/or negatively impacting our reputation if we are unable to, or are perceived (whether or not valid) not to, satisfy such requirements or expectations.
Such additional regulations may adversely affect our business, results of operations, cash flows and financial condition by increasing our compliance and manufacturing costs and/or negatively impacting our reputation if we are unable to, or are perceived (whether or not valid) not to, satisfy such requirements or expectations.
We face vigorous competition worldwide, including from strong local competitors and from other large, multinational companies, some of which have greater resources than we do. In addition, the substantial growth in eCommerce has encouraged the entry of new competitors and business models.
We face vigorous competition worldwide, including from strong local competitors (including private label competition) and from other large, multinational companies, some of which have greater resources than we do. In addition, the substantial growth in eCommerce has encouraged the entry of new competitors and business models.
The war has impacted and may continue to impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities, such as oil, consumer sentiment and consumption and category growth rates in the region.
The conflict has impacted and may continue to impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities, such as oil, consumer sentiment and consumption and category growth rates in the region.
We face various risks related to pandemics, epidemics or similar widespread public health concerns, which may have a material adverse effect on our business, results of operations, cash flows and financial condition. We face various risks related to pandemics, epidemics or similar widespread public health concerns.
We face various risks related to pandemics, epidemics or other widespread public health concerns, which may have a material adverse effect on our business, results of operations, cash flows and financial condition. We face various risks related to pandemics, epidemics or other widespread public health concerns.
For information regarding our legal and regulatory matters, see Item 3 “Legal Proceedings” and Note 13, Commitments and Contingencies to the Consolidated Financial Statements. Legal claims and proceedings could adversely impact our business.
For information regarding our legal and regulatory matters, see Item 3 “Legal Proceedings” and Note 12, Commitments and Contingencies to the Consolidated Financial Statements. Legal claims and proceedings could adversely impact our business.
They have used and may continue to use this leverage to demand higher trade discounts, allowances, slotting fees or increased investment, including through display media, paid search and co-op programs, which have led to and could continue to lead to reduced sales or profitability in certain markets.
They have used and may continue to use this leverage to demand higher trade discounts, allowances, slotting fees, increased investment, including through display media, paid search and co-op programs, or changes to product assortments, which have led to and could continue to lead to reduced sales or profitability in certain markets.
Our ability to launch new products, including our ability to deliver effective and efficient marketing campaigns, is also impacted by our ability to successfully adopt new technologies, such as artificial intelligence, including generative artificial intelligence.
Our ability to launch new products, including our ability to deliver effective and efficient marketing campaigns, is also impacted by our ability to successfully adopt new technologies, such as artificial intelligence, including machine learning and generative artificial intelligence.
See Item 3 “Legal Proceedings” and Note 13, Commitments and Contingencies to the Consolidated Financial Statements for additional information on certain of our legal claims and proceedings. Financial and Economic Risks Uncertain or unfavorable global economic conditions may adversely affect our business. Uncertain or unfavorable global economic conditions could adversely affect our business.
See Item 3 “Legal Proceedings” and Note 12, Commitments and Contingencies to the Consolidated Financial Statements for additional information on certain of our legal claims and proceedings. 17 Financial and Economic Risks Uncertain or unfavorable global economic conditions may adversely affect our business. Uncertain or unfavorable global economic conditions could adversely affect our business.
For additional information regarding our customers, see “Distribution; Raw Materials; Competition; Trademarks and Patents” in Item 1 “Business.” We also have been and may continue to be negatively affected by changes in the policies or practices of our retail trade customers, such as inventory destocking, fulfillment requirements, limitations on access to shelf space, delisting of our products, or sustainability, supply chain or packaging standards or initiatives.
For additional information regarding our customers, see “Distribution; Raw Materials; Competition; Trademarks and Patents” in Item 1 “Business.” We also have been and may continue to be negatively affected by changes in the policies or practices of our retail trade customers, such as inventory destocking, fulfillment requirements, technology-aided category pricing pressures, limitations on access to shelf space, delisting of our products, or sustainability, supply chain or packaging standards or initiatives.
Maintaining our strong reputation with consumers and our trade partners globally is critical to selling our branded products. Accordingly, we devote significant time and resources to programs designed to protect and preserve our reputation, such as our ethics and compliance, ESG, brand protection and product safety, regulatory and quality initiatives and our enterprise risk management program.
Maintaining our strong reputation with consumers and our trade partners globally is critical to selling our branded products. Accordingly, we devote significant time and resources to programs designed to protect and preserve our reputation, such as our ethics and compliance, sustainability and social impact, brand protection and product safety, regulatory and quality initiatives and our enterprise risk management program.
Such negative publicity could relate to, among other things, health concerns, threatened or pending litigation or regulatory proceedings, animal welfare, labor and human rights and environmental impact (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management) or our ESG practices.
Such negative publicity could relate to, among other things, health or quality concerns, threatened or pending litigation or regulatory proceedings, animal welfare, labor and human rights and environmental impact (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management) or our sustainability and social impact practices.
These geopolitical conflicts and tensions may also heighten other risks disclosed in this Annual Report on Form 10-K, any of which could have an adverse impact on our business, results of operations, cash flows or financial condition.
These geopolitical conflicts 7 andtensions may also heighten other risks disclosed in this Annual Report on Form 10-K, any of which could have an adverse impact on our business, results of operations, cash flows or financial condition.
A pandemic, epidemic or similar widespread health concern could have, and COVID-19 has had and may in the future have, a variety of impacts on our business, results of operations, cash flows and financial condition, including: • our ability to continue to maintain and support the health, safety and well-being of our employees, including key employees; • disruptions to our global supply chain, including transportation and logistics challenges; • a decrease in our workforce or in the efficiency of such workforce; • volatility in the demand for and availability of our products; • changes in purchasing patterns of our consumers; • significant volatility in demand for certain of our products, which may require us to increase our production capacity or acquire additional capacity at an additional cost and expense; • failure of third parties on which we rely to meet their obligations to us, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties; • significant changes in the economic and political conditions of the markets in which we operate; • disruptions and volatility in the global capital markets, including rising interest rates, which may increase the cost of capital and adversely impact our access to capital; and/or • volatility in foreign exchange rates and increases in the cost and availability of raw and packaging materials and transportation and logistics costs.
A pandemic, epidemic or other widespread health concern could have, and COVID-19 has had a variety of impacts on our business, results of operations, cash flows and financial condition, including: • our ability to continue to maintain and support the health, safety and well-being of our employees, including key employees; • disruptions to our global supply chain, including transportation and logistics challenges; • a decrease in our workforce or in the efficiency of such workforce; • volatility in the demand for and availability of our products; • changes in purchasing patterns of our consumers; • significant volatility in demand for certain of our products, which may require us to increase our production capacity or acquire additional capacity at an additional cost and expense; • failure of third parties on which we rely to meet their obligations to us, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties; • significant changes in the economic and political conditions of the markets in which we operate; • disruptions and volatility in the global capital markets, including rising interest rates, which may increase the cost of capital and adversely impact our access to capital; and/or • volatility in foreign exchange rates and increases in the cost and availability of raw and packaging materials and transportation and logistics costs. 11 Our success depends upon our ability to recruit, attract and retain key employees and the succession of senior management.
Unfavorable global economic conditions, such as a recession, an economic slowdown, inflation, higher interest rates and/or reduced category growth rates, including as a result of the war in Ukraine and/or the Israel-Hamas war, have negatively impacted and/or could negatively impact our business and result in declining revenues, profitability and/or cash flows.
Unfavorable global economic conditions, such as a recession, an economic slowdown, inflation, higher interest rates and/or reduced category growth rates, including as a result of the war in Ukraine and the conflict in the Middle East, have negatively impacted and/or could negatively impact our business and result in declining revenues, profitability and/or cash flows.
Further, consumer preferences continue to evolve due to a number of factors, including evolving consumer concerns or perceptions (whether or not valid) regarding environmental, social and governance (“ESG”) practices, including the sourcing and sustainability of raw and packaging materials, a growing demand for natural or organic products and ingredients and ingredient transparency, evolving consumer concerns or perceptions regarding the effects of ingredients, changing consumer sentiment toward non-local products or sources and changing perceptions of and increased focus on labor and human rights and environmental impacts (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management).
In addition, consumer preferences continue to evolve due to a number of factors, including evolving consumer concerns or perceptions (whether or not valid) regarding sustainability and social impact practices, including the sourcing and sustainability of raw and packaging materials, a demand for natural or organic products and ingredients and ingredient transparency, consumer concerns or perceptions regarding the effects of ingredients, consumer sentiment toward non-local products or sources and perceptions of and increased focus on labor and human rights and environmental impacts (including responsible sourcing, deforestation, packaging, plastic, energy and water use and waste management).
Cyberattacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and are being made by groups, individuals and nation states with a wide range of expertise and motives.
Cyberattacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and are being made by different threat actors including groups, individuals and nation states with a wide range of expertise and motives.
Furthermore, the imposition of tariffs and/or increase in tariffs on various products by the United States and other countries have introduced greater uncertainty with respect to trade policies and government regulations affecting trade between the United States and other countries and new and/or increased tariffs have subjected, and may continue in the future to subject, us to additional costs and expenditure of resources.
Furthermore, the imposition of tariffs and/or increases in tariffs on various raw materials or products, or threats to impose or increase such tariffs, by the United States and other countries have introduced greater uncertainty with respect to trade policies and government regulations affecting trade between the United States and other countries and new and/or increased tariffs have subjected, and may continue in the future to subject, us to additional costs and expenditure of resources.
See “Our business results depend on our ability to manage disruptions in our global supply chain and/or key office facilities” above for additional information. There is no guarantee that our ongoing efforts to reduce costs will be successful.
See “Our business results are impacted by our ability to manage disruptions in our global supply chain and/or key office facilities” above for additional information. There is no guarantee that our ongoing efforts to reduce costs will be successful.
While 10 we have policies and procedures for managing these relationships, they inherently involve a lesser degree of control over business operations, compliance and ESG practices, thereby potentially increasing our reputational and legal risk.
While we have policies and procedures for managing these relationships, they inherently involve a lesser degree of control over business operations, compliance and sustainability and social impact practices, thereby potentially increasing our reputational and legal risk.
Increases in the costs of and/or a reduction in the availability of commodities, energy, logistics (including trucks and containers) or other necessary services, including as a result of geopolitical conflicts, such as the war in Ukraine and the Israel-Hamas war and/or the impact of climatic events have affected and are likely to continue to adversely affect our profit margins.
Increases in the costs of and/or a reduction in the availability of commodities, energy (including fuel prices), logistics (including trucks and containers) or other necessary services, including as a result of geopolitical conflicts, such as the war in Ukraine and the conflict in the Middle East, and/or the impact of climatic events have affected and are likely to continue to adversely affect our profit margins.
As the frequency and magnitude of cybersecurity incidents increase globally, we may be unable to obtain the insurance coverage that we think is appropriate or necessary to offset the risk. 15 While we have disaster recovery and business continuity plans in place, if our IT/OT Systems are damaged, breached or cease to function properly for any reason, including the poor performance of, failure of or cyberattack on third-party service providers, catastrophic events, power outages, cybersecurity breaches, network outages, failed upgrades or other similar events and, if the disaster recovery and business continuity plans do not effectively resolve such issues on a timely basis, we may suffer interruptions in our ability to manage or conduct business as well as reputational harm, and may be subject to governmental investigations and litigation, any of which may adversely impact our business, results of operations, cash flows and financial condition.
While we have disaster recovery and business continuity plans in place, if our IT/OT Systems are damaged, breached or cease to function properly for any reason, including the poor performance of, failure of or cyberattack on third-party 15 service providers, catastrophic events, power outages, cybersecurity breaches, network outages, failed upgrades or other similar events and, if the disaster recovery and business continuity plans do not effectively resolve such issues on a timely basis, we may suffer interruptions in our ability to manage or conduct business as well as reputational harm, and may be subject to governmental investigations and litigation, any of which may adversely impact our business, results of operations, cash flows and financial condition.
Further, the retail landscape in many of our markets continues to evolve as a result of the substantial growth of eCommerce, changing consumer behaviors and preferences (as consumers increasingly shop online and via mobile and social applications) and the increased presence of alternative retail channels, such as subscription services and direct-to-customer businesses.
Further, the retail landscape in many of our markets continues to evolve as a result of the substantial growth of eCommerce, changing consumer behaviors and preferences (as consumers increasingly shop online, including to compare prices and product availability) and the increased presence of alternative retail channels, such as subscription services and direct-to-customer businesses.
Negative publicity about us, our brands, our products, our supply chain, our ingredients, our packaging, our ESG practices, or our employees, whether or not deserved, could jeopardize our reputation.
Negative publicity about us, our brands, our products, our supply chain, our ingredients, our packaging, our sustainability and social impact practices, or our employees, whether or not deserved, could jeopardize our reputation.
In addition, the increased concern over climate change has resulted and is likely to continue to result in transition risks, including additional legal and regulatory requirements intended to, among other things, reduce or mitigate the effects of climate change and have related and may relate to, among other things, greenhouse gas emissions (e.g., carbon pricing), alternative energy policy and additional disclosure obligations.
In addition, the increased concern over climate change has resulted and is likely to continue to result in transition risks, including additional legal and regulatory requirements intended to, among other things, reduce or mitigate the effects of climate change and have related and may relate to, among other things, greenhouse gas emissions (e.g., carbon pricing), alternative energy policy and additional disclosure obligations, such as the Corporate Sustainability Reporting Directive, and extended producer responsibility obligations that relate to our product packaging.
Major developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries, such as China, and any nationalist trends in specific countries could alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our business, results of operations, cash flows and financial condition.
Major developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries, such as China, Mexico and Canada, including those imposed following the United States’ February 2025 executive orders, and any nationalist trends in specific countries, have altered and could continue to alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our business, results of operations, cash flows and financial condition.
We face risks resulting from political and macroeconomic instability and geopolitical events and tensions, such as the ongoing war in Ukraine, the Israel-Hamas war and tensions between China and Taiwan.
We face risks resulting from political and macroeconomic instability and geopolitical events and tensions, such as the war in Ukraine, the conflict in the Middle East and tensions between China and Taiwan.
There is also increased focus, including by governmental and non-governmental organizations, investors, customers, consumers, regulators, our employees and other stakeholders on these and other sustainability and social impact matters, including responsible sourcing, deforestation, animal welfare, labor, employment and human rights, the use of plastic, energy and water, the recyclability or recoverability of packaging, including single-use and other plastic packaging, and a growing demand for natural or organic products and ingredient transparency, such as sources of palm oil and palm kernel oil.
There is also increased focus, including by governmental and non-governmental organizations, investors, customers, consumers, regulators, our employees and other stakeholders on these and other sustainability and social impact matters, including responsible sourcing, deforestation, animal welfare, labor, employment and human rights, the use of plastic, energy and water, the recyclability or recoverability of packaging, including single-use and other plastic packaging.
The war in Ukraine and the related geopolitical tensions have had and continue to have a significant impact on our operations in Ukraine and Russia, though it has not been material to our Consolidated Financial Statements. In Russia, we are importing and selling a reduced portfolio of health and hygiene products for everyday use.
The war in Ukraine and the related geopolitical tensions have had and continue to have a significant impact on our operations in Ukraine and Russia, though it has not been material to our Consolidated Financial Statements. We have no manufacturing facilities in Russia.
Nonetheless, a significant disruption to the manufacturing or sourcing of products or materials for any reason, including those mentioned above, have at times interrupted and could in 13 the future interrupt product supply and, if not remedied, could have an adverse impact on our business, results of operations, cash flows and financial condition.
Nonetheless, a significant disruption to the manufacturing or sourcing of products or materials for any reason, including those mentioned above, have at times interrupted and could in the future interrupt product supply and, if not remedied, could have an adverse impact on our business, results of operations, cash flows and financial condition. 13 In addition, as a result of our global shared service organizational model, certain of our functions, such as finance and accounting, customer service and logistics, human resources, global information technology and data analytics are concentrated in key office facilities.
In addition, many other jurisdictions outside of the European Union have also committed to implement this Directive while others have implemented a similar minimum tax regime consistent with the policy of the Directive. Important details of these minimum tax regimes are still being considered.
In addition, many other jurisdictions outside of the European Union have also implemented a similar minimum tax regime consistent with the policy of Pillar II. Detailed 18 regulations of these minimum tax regimes are still being considered in certain countries.
The Israel-Hamas war has not had a material impact on our Consolidated Financial Statements. Uncertainties and risks remain as to the duration of the war and its impact on geopolitical relations and stability in North Africa, the Middle East and nearby regions.
Uncertainties and risks remain as to the duration of the conflict and its impact on geopolitical relations and stability in North Africa, the wider Middle East and nearby regions.
We have pursued and may continue to pursue acquisitions and divestitures, which could adversely impact our business. We have pursued and may continue to pursue acquisitions of brands, businesses, assets or technologies from third parties.
If we do not (or are perceived not to) successfully implement these initiatives, our ability to recruit, attract and retain talent may be adversely impacted. We have pursued and may continue to pursue acquisitions and divestitures, which could adversely impact our business. We have pursued and may continue to pursue acquisitions of brands, businesses, assets or technologies from third parties.
Our reputation could be damaged if we do not (or are perceived not to) act responsibly with respect to sustainability matters, which could adversely affect our business, results of operations, cash flows and financial condition. We may not fully realize the benefits that we expect from our 2022 Global Productivity Initiative .
Our reputation could be damaged if we do not (or are perceived not to) act responsibly with respect to sustainability matters, which could adversely affect our business, results of operations, cash flows and financial condition. Our reliance on third parties in many aspects of our business could have an adverse effect on our business and results of operations.
The OECD is also addressing the challenges of the digitization of the global economy with plans to redefine jurisdictional taxation rights in market countries and establish a global minimum tax.
The OECD is also addressing the challenges of the digitization of the global economy with plans to redefine jurisdictional taxation rights in market countries and establish a global minimum tax. The European Union has established the Minimum Tax Directive (“Pillar II”) that provides for a minimum level of taxation for certain large corporations in every jurisdiction in which they operate.
We have no manufacturing facilities in Russia and have ceased all capital investments and media activities in Russia. For the year ended December 31, 2023, our business in the Eurasia region constituted approximately 2% of our consolidated net sales and approximately 3% of our consolidated operating profit.
For the year ended December 31, 2024, our business in the Eurasia region constituted approximately 1% of our consolidated net sales and approximately 2% of our consolidated operating profit.
In addition, businesses under consideration for, or otherwise subject to, divestiture may be adversely impacted prior to the divestiture, which could negatively impact our business, results of operations, cash flows and financial condition. Operational Risks Our business results are impacted by our ability to manage disruptions in our global supply chain and/or key office facilities.
In addition, businesses under consideration for, or otherwise subject to, divestiture may be adversely impacted prior to the divestiture, which could negatively impact our business, results of operations, cash flows and financial condition. If any planned divestiture is not able to be completed, we may also incur negative business and financial results.
We continue to embed new ways of working to, among other things, instill a growth mindset to drive innovation. If we do not (or are perceived not to) successfully implement these initiatives, our ability to recruit, attract and retain talent may be adversely impacted.
Our ability to attract and retain talent has been and may continue to be impacted by a number of factors, including challenges in the labor market. We continue to embed new ways of working to, among other things, instill a growth mindset to drive innovation.
Additionally, due to the scale and scope of our business, we must rely on relationships with third parties, including our suppliers, distributors, contractors, joint venture partners and other external business partners, for certain functions.
Further, the use of generative artificial intelligence tools may compromise our confidential or sensitive information or put our intellectual property at risk or subject us to claims of intellectual property infringement, which could in turn damage our reputation. 10 Additionally, due to the scale and scope of our business, we must rely on relationships with third parties, including our suppliers, distributors, contractors, joint venture partners and other external business partners, for certain functions.
We also face challenges to our ability to repatriate cash from Russia and find banking partners in Russia and may face challenges to our ability to protect our assets in Russia. We also continue to monitor the impact of the sanctions, export controls and import restrictions imposed in response to the war in Ukraine.
We also have faced and continue to face challenges to our ability to repatriate cash from Russia and to identify banking partners to support our Russian operations and may face challenges to our ability to protect our assets in Russia.
We are engaged in the manufacture and sourcing of products and materials on a global scale.
Operational Risks Our business results are impacted by our ability to manage disruptions in our global supply chain and/or key office facilities. We are engaged in the manufacture and sourcing of products and materials on a global scale.
While the prices of many commodities and services have started to stabilize or decline, inflationary pressures may continue to increase the cost of such commodities and services.
While the prices of many commodities and services have retreated from their historical peaks, prices may increase again, which could create year-over-year inflationary pressure.
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These situations are evolving and 7 significant uncertainties regarding their full impact or their related impacts on the global economy and geopolitical relations in general and on our business in particular remain.
Added
We also continue to monitor the impact of the sanctions, export controls and import restrictions imposed generally and in response to the war in Ukraine. The conflict in the Middle East has not had a material impact on our Consolidated Financial Statements.
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Further, the use of generative artificial intelligence tools may compromise our confidential or sensitive information or put our intellectual property at risk, which could in turn damage our reputation.
Added
As the frequency and magnitude of cybersecurity incidents increase globally, we may be unable to obtain the insurance coverage that we think is appropriate or necessary to offset the risk.
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These and other risks impacted us during the COVID-19 pandemic. Other pandemics, epidemics or similar widespread public health concerns may adversely affect our business, results of operations, cash flows and financial condition in the future.
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From many of these stakeholders, there is also a growing demand for natural or organic products and ingredient transparency, such as sources of palm oil and palm kernel oil, and an increased focus on reducing our impact on nature.
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For additional information regarding how COVID-19 continues to affect our business, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Overview.” 11 Our success depends upon our ability to recruit, attract and retain key employees, including through the implementation of diversity, equity and inclusion initiatives, and the succession of senior management.
Added
We use third parties including, but not limited to, suppliers, contract manufacturers, distributors, commercial banks and other external business partners, to support many aspects of our business including those that provide support across much of the lifespan of our products from the purchasing of ingredients up to and including the sale of our products to consumers.
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Our ability to attract and retain talent has been and may continue to be impacted by a number of factors, including challenges in the labor market. In addition, we continue to work to advance culture change through the implementation of DE&I initiatives and the launch of our evolved corporate values and new leadership framework throughout our organization.
Added
While we maintain robust policies and procedures to govern and manage our interactions with and requirements of these third parties, including building in redundancies and alternatives wherever possible, we inherently have a lesser degree of control over the business operations, governance and compliance of these unrelated entities.
Removed
For example, in the fourth quarter of 2022, we took non-cash, aftertax impairment charges of $620 million, to adjust the carrying values of goodwill and intangible assets related to the Filorga skin health business.
Added
As a result, disruptions in these relationships or the failure of these third parties to meet their obligations to us could have an adverse effect on our reputation and our business, results of operations, cash flows and financial condition. Legal and Regulatory Risks Our business is subject to legal and regulatory risks in the U.S. and abroad.
Removed
In addition, as a result of our global shared service organizational model, certain of our functions, such as finance and accounting, customer service and logistics, human resources, global information technology and data analytics are concentrated in key office facilities.
Added
Other than significant additional time and resources to comply, based on our preliminary evaluation, Pillar II did not have a material impact as of December 31, 2024 and we do not believe it will have a material impact on our business, results of operations, cash flows and financial condition.
Removed
On January 27, 2022, the Board approved a targeted productivity program (the “2022 Global Productivity Initiative”). The program is intended to reallocate resources toward our strategic priorities and faster growth businesses, drive efficiencies in our operations and streamline our supply chain to reduce structural costs.
Removed
The successful implementation of the program may present organizational challenges and, in some cases, may require successful negotiations with third parties. As a result, we may not be able to fully realize all of the anticipated benefits from the 2022 Global Productivity Initiative.
Removed
Events and circumstances, such as financial or strategic difficulties, delays and unexpected costs may occur that could result in our not realizing all of the anticipated benefits or our not realizing such benefits on our expected timetable.
Removed
In addition, changes in foreign exchange rates or in tax, labor or immigration laws may result in our not achieving the anticipated cost savings as measured in U.S. dollars. If we are unable to fully realize the anticipated savings from the 2022 Global Productivity Initiative, our ability to fund other initiatives and enhance profitability may be adversely affected.
Removed
Any failure to implement the 2022 Global Productivity Initiative in accordance with our expectations could adversely affect our business, results of operations, cash flows and financial condition.
Removed
For additional information regarding the 2022 Global Productivity Initiative, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Restructuring and Related Implementation Charges.” 16 Legal and Regulatory Risks Our business is subject to legal and regulatory risks in the U.S. and abroad.
Removed
In addition, we are evaluating the impact of recent legislation, such as the Minimum Tax Directive in the European Union that provides for a minimum level of taxation for certain large corporations in every jurisdiction in which they operate.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee also oversees risks associated with cybersecurity, financial reporting and legal matters (including data privacy, competition law, litigation and ethics and compliance). Our Board of Directors has adopted a written statement, known as the Independent Board Candidate Qualifications and made available on our website, outlining the qualities sought in our directors.
Biggest changeOur Board of Directors has adopted a written statement, known as the Independent Board Candidate Qualifications and made available on our website, outlining the qualities sought in our directors. This statement, which is refreshed periodically, is used by the Nominating, Governance and Corporate Responsibility Committee (“NGCR Committee”) to evaluate individual director candidates.
Additionally, we maintain an offensive security team that works both independently and with third party cybersecurity professionals to conduct security assessments of our 21 enterprise-wide cybersecurity practices, including penetration testing, and identify areas for continuous improvement within the information security program.
Additionally, we maintain an offensive security team that 21 works both independently and with third party cybersecurity professionals to conduct security assessments of our enterprise-wide cybersecurity practices, including penetration testing, and identify areas for continuous improvement within the information security program.
He has led our information technology Operational Performance and Reliability Committee for the last eight years, which reviews and provides continuous improvement processes and technology across infrastructure, information security, architecture, application and end user performance. He has application development leadership experience across all functions, including the policies and controls that govern both application development and implementation of packaged software.
He has led our information technology Operational Performance and Reliability Committee for the last nine years, which reviews and provides continuous improvement processes and technology across infrastructure, information security, architecture, application and end user performance. He has application development leadership experience across all functions, including the policies and controls that govern both application development and implementation of packaged software.
He has been leading our global information security program for almost five years. He is a Certified Information Systems Professional, a member of Google Cloud CISO Customer Advisory Board and New Jersey Infragard and completed the FBI CISO Academy.
He has been leading our global information security program for almost seven years. He is a Certified Information Systems Professional, a member of Google Cloud CISO Customer Advisory Board and New Jersey Infragard and completed the FBI CISO Academy.
Our CISO provides a report to the Audit Committee on cybersecurity quarterly, or more frequently if circumstances warrant, including relevant cybersecurity incidents impacting the Company and on topics related to information security, data privacy and cyber risks and mitigation strategies. In addition, outside experts periodically present to the Board on cybersecurity. 22
Our CISO reports to the Audit Committee on cybersecurity quarterly, or more frequently if circumstances warrant, including relevant cybersecurity incidents impacting the Company and on topics related to information security, data privacy and cyber risks and mitigation strategies. In addition, outside experts periodically present to the Board on cybersecurity. 22
Directors with experience overseeing and managing risk management processes play a critical role in the Board’s oversight of our enterprise risk management process.
The NGCR Committee has identified experience with overseeing and managing risk management processes, including with respect to cybersecurity, as being important to creating an effective, well-rounded and diverse Board. Directors with experience overseeing and managing risk management processes play a critical role in the Board’s oversight of our enterprise risk management process.
Removed
This statement, which is refreshed periodically and was most recently updated in January 2023, is used by the Nominating, Governance and Corporate Responsibility Committee (“NGCR Committee”) in evaluating individual director candidates. The NGCR Committee has identified experience with overseeing and managing risk management processes, including with respect to cybersecurity, as being important to creating an effective, well-rounded and diverse Board.
Added
He has a certification from Stanford University for Cybersecurity and Executive Strategy.
Added
The Company is a member of the Retail and Hospitality Information Sharing and Analysis Center, which provides additional intelligence associated with threats pertaining to our industry.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOutside the U.S., we operate in approximately 235 properties, of which 58 are owned, in over 80 countries. Major overseas manufacturing and warehousing facilities used by the Oral, Personal and Home Care product segment of our business are located in Australia, Brazil, China, Colombia, France, Greece, Guatemala, India, Italy, Mexico, Poland, South Africa, Thailand, Turkiye and Vietnam.
Biggest changeOutside the U.S., we operate in approximately 230 properties, of which 58 are owned, in over 80 countries. Major overseas manufacturing and warehousing facilities used by the Oral, Personal and Home Care product segment of our business are located in Australia, Brazil, China, Colombia, France, Greece, Guatemala, India, Italy, Mexico, Poland, South Africa, Thailand, Türkiye and Vietnam.
ITEM 2. PROPERTIES We own or lease approximately 320 properties, which include manufacturing, distribution, research and development and office facilities worldwide. Our corporate headquarters is located in a leased property at 300 Park Avenue, New York, New York. In the U.S., we operate in approximately 85 properties, of which 17 are owned.
ITEM 2. PROPERTIES We own or lease approximately 315 properties, which include manufacturing, distribution, research and development and office facilities worldwide. Our corporate headquarters is located in a leased property at 300 Park Avenue, New York, New York. In the U.S., we operate in approximately 85 properties, of which 17 are owned.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table shows the share repurchase activity for the three months in the quarter ended December 31, 2023: Month Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (3) (in millions) October 1 through 31, 2023 791,784 $ 71.01 761,912 $ 3,041 November 1 through 30, 2023 385,842 $ 75.82 380,200 $ 3,012 December 1 through 31, 2023 1,707,326 $ 78.16 1,696,952 $ 2,879 Total 2,884,952 $ 75.89 2,839,064 _______ (1) Includes share repurchases under the 2022 Program and those associated with certain employee elections under the Company’s compensation and benefit programs.
Biggest changeThe following table shows the share repurchase activity for the three months in the quarter ended December 31, 2024: Month Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (3) (in millions) October 1 through 31, 2024 1,194,671 $ 99.07 1,190,665 $ 1,517 November 1 through 30, 2024 554,917 $ 92.51 549,900 $ 1,466 December 1 through 31, 2024 3,045,662 $ 93.15 3,035,383 $ 1,183 Total 4,795,250 $ 94.55 4,775,948 (1) Includes share repurchases under the 2022 Program and those associated with certain employee elections under the Company’s compensation and benefit programs.
(3) Includes approximate dollar value of shares that were available to be purchased under the publicly announced plans or programs that were in effect as of December 31, 2023.
(3) Includes approximate dollar value of shares that were available to be purchased under the publicly announced plans or programs that were in effect as of December 31, 2024.
(2) The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs is 45,888 shares, which represents shares deemed surrendered to the Company to satisfy certain employee elections under the Company’s compensation and benefit programs.
(2) The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs is 19,302 shares, which represents shares deemed surrendered to the Company to satisfy certain employee elections under the Company’s compensation and benefit programs.
For information regarding the securities authorized for issuance under our equity compensation plans, refer to “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” included in Part III, Item 12 of this report. As of December 31, 2023, the number of common shareholders of record was 16,595.
For information regarding the securities authorized for issuance under our equity compensation plans, refer to “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” included in Part III, Item 12 of this report. As of December 31, 2024, the number of common shareholders of record was 15,598.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the twelve months ended December 31, 2023 and 2022, charges resulting from the 2022 Global Productivity Initiative are reflected in the income statement as follows: Twelve Months Ended December 31, 2023 2022 Gross Profit $ 1 $ — Selling, general and administrative expenses 2 5 Other (income) expense, net 24 90 Non-service related postretirement costs 5 15 Total 2022 Global Productivity Initiative charges, pretax $ 32 $ 110 Total 2022 Global Productivity Initiative charges, aftertax $ 25 $ 87 Restructuring and related implementation charges in the preceding table are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance. 45 (Dollars in Millions Except Per Share Amounts) Total charges incurred for the 2022 Global Productivity Initiative relate to initiatives undertaken by the following reportable operating segments: Twelve Months Ended December 31, Program-to-date Accumulated Charges 2023 2022 North America 15 % 11 % 12 % Latin America — % 18 % 14 % Europe 19 % 19 % 19 % Asia Pacific 20 % 8 % 11 % Africa/Eurasia 5 % 11 % 9 % Hill's Pet Nutrition 23 % 11 % 14 % Corporate 18 % 22 % 21 % Total 100 % 100 % 100 % Since the inception of the 2022 Global Productivity Initiative, the Company has incurred cumulative pretax charges of $142 ($112 aftertax) in connection with the implementation of various projects as follows: Cumulative Charges as of December 31, 2023 Employee-Related Costs $ 126 Incremental Depreciation — Asset Impairments 1 Other 15 Total $ 142 The following table summarizes the activity for the restructuring and related implementation charges discussed above and the related accruals: Twelve Months Ended December 31, Employee-Related Costs Incremental Depreciation Asset Impairments Other Total Balance at December 31, 2021 $ — $ — $ — $ — $ — Charges 102 — 1 7 110 Cash Payments (53) — — (4) (57) Charges against assets (15) — — — (15) Foreign exchange (4) — — — (4) Balance at December 31, 2022 $ 30 $ — $ 1 $ 3 $ 34 Charges 24 — — 8 32 Cash Payments (45) — — (10) (55) Charges against assets (5) — (1) — (6) Foreign exchange 6 — — — 6 Balance at December 31, 2023 $ 10 $ — $ — $ 1 $ 11 46 (Dollars in Millions Except Per Share Amounts) Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, written severance policies, local statutory requirements and, in certain cases, voluntary termination arrangements.
Biggest changeFor the twelve months ended December 31, 2024 and December 31, 2023, charges resulting from the 2022 Global Productivity Initiative are reflected in the income statement as follows: Twelve Months Ended December 31, 2024 2023 Gross Profit $ 20 $ 1 Selling, general and administrative expenses 6 2 Other (income) expense, net 59 24 Non-service related postretirement costs — 5 Total 2022 Global Productivity Initiative charges, pretax $ 85 $ 32 Total 2022 Global Productivity Initiative charges, aftertax $ 73 $ 25 Restructuring and related implementation charges are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance. 45 (Dollars in Millions Except Per Share Amounts) Total charges incurred for the 2022 Global Productivity Initiative relate to initiatives undertaken by the following reportable operating segments: Twelve Months Ended December 31, Total Program Charges 2024 2023 North America (1) 3 % 15 % 9 % Latin America — % — % 9 % Europe (1) 89 % 19 % 44 % Asia Pacific — % 20 % 7 % Africa/Eurasia — % 5 % 6 % Hill's Pet Nutrition 6 % 23 % 11 % Corporate 2 % 18 % 14 % Total 100 % 100 % 100 % (1) The Company has recast its historical geographic segment information to conform to the reporting structure effective as of July 1, 2024.
The Company utilizes forward-starting interest rate swaps to mitigate the risk of variability in interest rate for future debt issuances. The notional amount, interest payment and maturity date of the swaps generally match the principal, interest payment and maturity date of the related debt, and the swaps are valued using observable benchmark rates.
The Company utilizes forward-starting interest rate swaps to mitigate the risk of variability in interest rates for future debt issuances. The notional amount, interest payment and maturity date of the swaps generally match the principal, interest payment and maturity date of the related debt, and the swaps are valued using observable benchmark rates.
The Company’s significant policies that involve the selection of alternative methods are accounting for inventories and shipping and handling costs. ▪ The Company accounts for inventories using both the first-in, first-out ( “ FIFO ” ) method (75% of inventories) and the last-in, first-out ( “ LIFO ” ) method (25% of inventories).
The Company’s significant policies that involve the selection of alternative methods are accounting for inventories and shipping and handling costs. ▪ The Company accounts for inventories using both the first-in, first-out ( “ FIFO ” ) method (approximately 75% of inventories) and the last-in, first-out ( “ LIFO ” ) method (approximately 25% of inventories).
A 1% change in the discount rate for the U.S. pension plans and U.S. other retiree benefit plan would impact future Net income attributable to Colgate-Palmolive Company by approximately $0 and $2, respectively.
A 1% change in the discount rate for the U.S. pension plans and the other U.S. retiree benefit plan would impact future Net income attributable to Colgate-Palmolive Company by approximately $1 and $2, respectively.
Our commitment to these priorities, the strength of our brands, the breadth of our global footprint and a commitment to profitability and driving efficiency in cash generation should position us well to manage through the challenges we face and increase shareholder value over time. 29 (Dollars in Millions Except Per Share Amounts) Results of Operations This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Our commitment to these priorities, the strength of our brands, the breadth of our global footprint and a commitment to profitability and driving efficiency in cash generation should position us well to manage through the challenges we face and increase shareholder value over time. 29 (Dollars in Millions Except Per Share Amounts) Results of Operations This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
In 2023, Net income attributable to Colgate-Palmolive Company included charges resulting from the ERISA litigation matter, the foreign tax matter, the 2022 Global Productivity Initiative and product recall costs.
In 2024, Net income attributable to Colgate-Palmolive Company included charges resulting from the 2022 Global Productivity Initiative. In 2023, Net income attributable to Colgate-Palmolive Company included charges resulting from the ERISA litigation matter, the foreign tax matter and the 2022 Global Productivity Initiative and product recall costs.
The Company’s critical accounting policies are reviewed periodically with the Audit Committee of the Board of Directors. In certain instances, accounting principles generally accepted in the United States of America allow for the selection of alternative accounting methods.
The Company’s critical accounting policies are reviewed periodically with the Audit Committee of the Board. In certain instances, accounting principles generally accepted in the United States of America allow for the selection of alternative accounting methods.
A 1% increase in the assumed long-term medical cost trend rate would impact future Net income attributable to Colgate-Palmolive Company by $2. ▪ The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock units (both performance-based and time-vested), based on the fair value of those awards at the date of grant.
A 1% change in the assumed long-term medical cost trend rate would impact future Net income attributable to Colgate-Palmolive Company by $2. ▪ The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock units (both performance-based and time-vested), based on the fair value of those awards at the date of grant.
As more fully described in Note 13, Commitments and Contingencies to the Consolidated Financial Statements, the Company has commitments and contingencies with respect to lawsuits, environmental matters, taxes and other matters arising in the ordinary course of business. 52 (Dollars in Millions Except Per Share Amounts) Off-Balance Sheet Arrangements The Company does not have off-balance sheet financing or unconsolidated special purpose entities.
As more fully described in Note 12, Commitments and Contingencies to the Consolidated Financial Statements, the Company has commitments and contingencies with respect to lawsuits, environmental matters, taxes and other matters arising in the ordinary course of business. 52 (Dollars in Millions Except Per Share Amounts) Off-Balance Sheet Arrangements The Company does not have off-balance sheet financing or unconsolidated special purpose entities.
Average annual rates of return for the U.S. plans for the most recent 1-year, 5-year, 10-year, 15-year and 25-year periods were 10%, 5%, 4%, 6% and 5%, respectively.
Average annual rates of return for the U.S. plans for the most recent 1-year, 5-year, 10-year, 15-year and 25-year periods were 5%, 2%, 4%, 6% and 5%, respectively.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
There would have been no material impact on reported earnings for 2023 or 2022 had all inventories been accounted for under the FIFO method. ▪ Shipping and handling costs (also referred to as logistics costs) may be reported as either a component of Cost of sales or Selling, general and administrative expenses.
There would have been no material impact on reported earnings for 2024 or 2023 had all inventories been accounted for under the FIFO method. ▪ Shipping and handling costs (also referred to as logistics costs) may be reported as either a component of Cost of sales or Selling, general and administrative expenses.
In addition, we review market share and other data to assess how our brands are performing within their categories on a global and regional basis. The monitoring of these indicators and our Code of Conduct and corporate governance practices help to maintain business health and strong internal controls.
In addition, we review market share, household penetration and other data to assess how our brands are performing within their categories on a global and regional basis. The monitoring of these indicators and our Code of Conduct and corporate governance practices help to maintain business health and strong internal controls.
Significant Items Impacting Comparability During the quarter ended June 30, 2023, we reassessed with our legal and tax advisers certain tax deductions taken in prior years by one of our subsidiaries and concluded that it is more likely than not that the deductions would not be sustained by the courts in that jurisdiction.
Significant Items Impacting Comparability During the quarter ended June 30, 2023, we reassessed with our legal and tax advisers certain tax deductions taken in prior years by one of our subsidiaries and concluded that it was more likely than not that the deductions would not be sustained by the courts in that jurisdiction.
The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the income tax expense in the quarter ended June 30, 2023, partially offset by the reversal of certain prior years’ withholding tax reserves of $22 that are no longer required (hereinafter referred to as the “foreign tax matter”).
The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the quarter ended June 30, 2023 income tax expense, partially offset by the reversal of certain prior years’ withholding tax reserves of $22 that were no longer required (hereinafter referred to as the “foreign tax matter”).
Noncompliance with these requirements could ultimately result in the acceleration of amounts owed. The Company is in full compliance with all such requirements and believes the likelihood of noncompliance is remote. Refer to Note 6, Long-Term Debt and Credit Facilities to the Consolidated Financial Statements for further information about the Company’s long-term debt and credit facilities.
Noncompliance with these requirements could ultimately result in the acceleration of amounts owed. The Company is in full compliance with all such requirements and believes the likelihood of noncompliance is remote. Refer to Note 5, Long-Term Debt and Credit Facilities to the Consolidated Financial Statements for further information about the Company’s long-term debt and credit facilities.
Refer to Note 13, Commitments and Contingencies to the Consolidated Financial Statements for further discussion of the Company’s contingencies. 57 (Dollars in Millions Except Per Share Amounts) The Company generates revenue through the sale of well-known consumer products to trade customers under established trading terms.
Refer to Note 12, Commitments and Contingencies to the Consolidated Financial Statements for further discussion of the Company’s contingencies. 57 (Dollars in Millions Except Per Share Amounts) The Company generates revenue through the sale of well-known consumer products to trade customers under established trading terms.
Additionally, liabilities for unrecognized income tax benefits are excluded from the table above as the Company is unable to reasonably predict the ultimate amount or timing of a settlement of such liabilities. See Note 11, Income Taxes to the Consolidated Financial Statements for more information.
Additionally, liabilities for unrecognized income tax benefits are excluded from the table above as the Company is unable to reasonably predict the ultimate amount or timing of a settlement of such liabilities. See Note 10, Income Taxes to the Consolidated Financial Statements for more information.
A third assumption is the long-term rate of compensation increase for the pension plans, a change in which would partially offset the impact of a change in either the discount rate or the expected long-term rate of return. This rate was 3.50% as of December 31, 2023 and 2022.
A third assumption is the long-term rate of compensation increase for the pension plans, a change in which would partially offset the impact of a change in either the discount rate or the expected long-term rate of return. This rate was 3.50% as of December 31, 2024 and 2023.
Refer to Note 10, Retirement Plans and Other Retiree Benefits to the Consolidated Financial Statements for further discussion of the Company’s pension and other postretirement plans. ▪ The assumption requiring the most judgment in accounting for other postretirement benefits (other than the discount rate noted above) is the medical cost trend rate.
Refer to Note 9, Retirement Plans and Other Retiree Benefits to the Consolidated Financial Statements for further discussion of the Company’s pension and other postretirement plans. ▪ The assumption requiring the most judgment in accounting for other postretirement benefits (other than the discount rate noted above) is the medical cost trend rate.
A one-year change in expected term would result in a change in fair value of approximately 6%. A 1% change in volatility would change fair value by approximately 4%. The Company uses a Monte-Carlo simulation to determine the fair value of performance-based restricted stock units at the date of grant.
A one-year change in expected term would result in a change in fair value of approximately 7%. A 1% change in volatility would change fair value by approximately 4%. The Company uses a Monte-Carlo simulation to determine the fair value of performance-based restricted stock units at the date of grant.
The war has impacted and may continue to impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities, such as oil, consumer sentiment and consumption and category growth rates in the region.
The conflict has impacted and may continue to impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities such as oil, consumer sentiment and consumption and category growth rates in the region.
While the global marketplace in which we operate has always been highly competitive, we continue to experience heightened competitive activity in certain markets from strong local competitors, from other large multinational companies, some of which have greater resources than we do, and from new entrants into the market in many of our categories.
While the global marketplace in which we operate has always been highly competitive, we continue to experience heightened competitive activity in certain markets from strong local competitors (including private label competitors), from other large multinational companies, some of which have greater resources than we do, and from new entrants into the market in many of our categories.
Based on current information, the Company is not required to make a mandatory contribution to its qualified U.S. pension plan in 2024. The Company does not expect to make any voluntary contributions to its U.S. postretirement plans in 2024.
Based on current information, the Company is not required to make a mandatory contribution to its qualified U.S. pension plan in 2025. The Company does not expect to make any voluntary contributions to its U.S. postretirement plans in 2025.
A 1% change in the assumed rate of return on plan assets of the U.S. pension plans would impact future Net income attributable to Colgate-Palmolive Company by approximately $12.
A 1% change in the assumed rate of return on plan assets of the U.S. pension plans would impact future Net income attributable to Colgate-Palmolive Company by approximately $11.
The Oral, Personal and Home Care product segment is managed geographically in five reportable operating segments: North America, Latin America, Europe, Asia Pacific and Africa/Eurasia, all of which sell primarily to a variety of traditional and eCommerce retailers, wholesalers, distributors, dentists and, in some segments, skin health professionals.
The Oral, Personal and Home Care product segment is managed geographically in five reportable operating segments: North America, Latin America, Europe, Asia Pacific and Africa/Eurasia, all of which sell primarily to a variety of retailers, wholesalers, distributors, dentists and, in some geographies, skin health professionals.
Full year 2023 market shares in toothpaste were up in Europe, Asia Pacific and Africa/Eurasia, down in North America and flat in Latin America versus full year 2022. In the manual toothbrush category, full year 2023 market shares were up in Europe, down in North America, Asia Pacific and Africa/Eurasia and flat in Latin America versus full year 2022.
Full year 2024 market shares in toothpaste were up in Latin America, Europe and Africa/Eurasia, flat in Asia Pacific and down in North America versus full year 2023. In the manual toothbrush category, full year 2024 market shares were up in North America, Latin America and Asia Pacific and flat in Europe and Africa/Eurasia versus full year 2023.
Given the inherent uncertainties of estimating the future impacts of interest rates and inflation on macroeconomic conditions, actual results may differ from management’s current estimates, which could potentially result in additional impairment charges in future periods. ▪ The recognition and measurement of uncertain tax positions involves consideration of the amounts and probabilities of various outcomes that could be realized upon ultimate resolution. ▪ Tax valuation allowances are established to reduce deferred tax assets, such as tax loss carryforwards, to net realizable value.
Given the inherent uncertainties of estimating the future cash flows, the impact of interest rates and inflation on macroeconomic conditions, actual results may differ from management’s current estimates, which could potentially result in impairment charges in future periods. ▪ The recognition and measurement of uncertain tax positions involves consideration of the amounts and probabilities of various outcomes that could be realized upon ultimate resolution. ▪ Tax valuation allowances are established to reduce deferred tax assets, such as tax loss carryforwards, to net realizable value.
(3) The Company had outstanding contractual obligations with suppliers at the end of 2023 for the purchase of raw, packaging and other materials and services in the normal course of business.
(3) The Company had outstanding contractual obligations with suppliers at the end of 2024 for the purchase of raw, packaging and other materials and services in the normal course of business.
While we have taken, and will continue to take, measures to mitigate the effect of these conditions, such as the 2022 Global Productivity Initiative and our funding-the-growth and revenue growth management initiatives, in the current environment, it may become increasingly difficult to implement certain of these mitigation strategies. Should these conditions persist, they could adversely affect our future results.
While we have taken, and will continue to take, measures to mitigate the effect of these conditions, such as our funding-the-growth and revenue growth management initiatives, in the current environment it may become increasingly difficult to implement certain of these mitigation strategies. Should these conditions persist, they could adversely affect our future results.
The assumed expected long-term rate of return on plan assets for U.S. plans was 6.50% as of December 31, 2023 and 6.25% as of December 31, 2022. In determining the expected long-term rate of return, the Company considers the nature of the plans’ investments and the historical rate of return.
The assumed expected long-term rate of return on plan assets for U.S. plans was 6.50% as of December 31, 2024 and 2023. In determining the expected long-term rate of return, the Company considers the nature of the plans’ investments and the historical rate of return.
In 2023, Non-service related postretirement costs included charges related to the ERISA litigation matter and charges resulting from the 2022 Global Productivity Initiative. In 2022, Non-service related postretirement costs included charges resulting from the 2022 Global Productivity Initiative.
In 2023, Non-service related postretirement costs included charges related to the ERISA litigation matter and the 2022 Global Productivity Initiative.
A reconciliation of organic sales growth to Net sales growth for the years ended December 31, 2023 and 2022 is provided below.
A reconciliation of organic sales growth to Net sales growth for the years ended December 31, 2024 and 2023 is provided below.
At December 31, 2023, the Company had access to unused domestic and foreign lines of credit of $3,574 (including under the facility discussed below) and could also issue long-term debt pursuant to an effective shelf registration statement.
At December 31, 2024, the Company had access to unused domestic and foreign lines of credit of $3,725 (including under the facility discussed below) and could also issue long-term debt pursuant to an effective shelf registration statement.
The value of the tax deductions was not material to the Company in any year in which they were taken.
The value of the tax deductions was not material to us in any year in which they were taken.
The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the second quarter’s income tax expense, partially offset by the reversal of certain prior years’ withholding tax reserves of $22 that are no longer required. The tax liability was paid in the quarter ended September 30, 2023.
The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the quarter ended June 30, 2023 income tax expense, partially offset by the reversal of certain prior years’ withholding tax reserves of $22 that were no longer required. The tax liability was paid in the quarter ended September 30, 2023.
The Company classifies commercial paper and certain current maturities of notes payable as long-term debt when it has the intent and ability to refinance such obligations on a long-term basis, including, if necessary, by utilizing its available lines of credit (under the facilities discussed above). 50 (Dollars in Millions Except Per Share Amounts) The following is a summary of the Company’s commercial paper as of December 31, 2023 and 2022: 2023 2022 Weighted Average Interest Rate Maturities Outstanding Weighted Average Interest Rate Maturities Outstanding Commercial Paper 4.0 % 2024 906 2.1 % 2023 1,778 Certain of the agreements with respect to the Company’s bank borrowings contain financial and other covenants as well as cross-default provisions.
The Company classifies commercial paper as long-term debt when it has the intent and ability to refinance such obligations on a long-term basis, including, if necessary, by utilizing its available lines of credit (under the facilities discussed above). 50 (Dollars in Millions Except Per Share Amounts) The following is a summary of the Company’s commercial paper as of December 31, 2024 and 2023: 2024 2023 Weighted Average Interest Rate Maturities Outstanding Weighted Average Interest Rate Maturities Outstanding Commercial Paper 3.0 % 2025 $ 936 4.0 % 2024 $ 906 Certain of the agreements with respect to the Company’s bank borrowings contain financial and other covenants as well as cross-default provisions.
For more information about factors that could impact our business, including due to geopolitical conflicts, such as the war in Ukraine and the Israel-Hamas war, refer to Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K.
For more information about factors that could impact our business, including due to geopolitical conflicts, such as the war in Ukraine and the conflict in the Middle East, refer to Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K.
Actual events or results may differ materially because of factors that affect international businesses and global economic conditions, as well as matters specific to the Company and the markets it serves, including the uncertain macroeconomic and political environment in different countries, including as a result of inflation and rising interest rates, and its effect on consumer confidence and spending, foreign currency rate fluctuations, exchange controls, import restrictions, tariffs, sanctions, price or profit controls, labor relations, changes in foreign or domestic laws or regulations or their interpretation, political and fiscal developments, including changes in trade, tax and immigration policies, increased competition and evolving competitive practices (including from the growth of eCommerce and the entry of new competitors and business models), the ability to operate and respond effectively during a pandemic, epidemic or widespread public health concern, the ability to manage disruptions in our global supply chain and/or key office facilities, the ability to manage the availability and cost of raw and packaging materials and logistics costs, the ability to maintain or increase selling prices as needed, changes in the policies of retail trade customers, the emergence of alternative retail channels, the growth of eCommerce and the rapidly changing retail landscape (as consumers increasingly shop online and through mobile applications), the ability to develop innovative new products, the ability to continue lowering costs and operate in an agile manner, the ability to maintain the security of our information and operational technology systems from a cybersecurity incident or data breach, the ability to address the effects of climate change and achieve our sustainability and social impact goals, the ability to complete acquisitions and divestitures as planned, the ability to successfully integrate acquired businesses, the ability to attract and retain key employees and integrate DE&I initiatives across our organization, the uncertainty of the outcome of legal proceedings, whether or not the Company believes they have merit, and the ability to address uncertain or unfavorable global economic conditions, including inflation, disruptions in the credit markets and tax matters.
Actual events or results may differ materially because of factors that affect international businesses and global economic conditions, as well as matters specific to the Company and the markets it serves, including the uncertain macroeconomic and political environment in different countries, including as a result of inflation and higher interest rates, and its effect on consumer confidence and spending, foreign currency rate fluctuations, exchange controls, import restrictions, tariffs, sanctions, price or profit controls, labor relations, changes in foreign or domestic laws or regulations or their interpretation, political and fiscal developments, including changes in trade, tax and immigration policies, increased competition and evolving competitive practices, the ability to operate and respond effectively during a pandemic, epidemic or widespread public health concern, the ability to manage disruptions in our global supply chain and/or key office facilities, the ability to manage the availability and cost of raw and packaging materials and logistics costs, the ability to maintain or increase selling prices as needed, changes in the policies of retail trade customers, the emergence of alternative retail channels, the growth of eCommerce and the rapidly changing retail landscape, the ability to develop innovative new products and successfully adopt new technologies (such as artificial intelligence), the ability to continue lowering costs and operate in an agile manner, the ability to maintain the security of our information and operational technology systems from a cybersecurity incident or data breach, the ability to address the effects of climate change and achieve our sustainability and social impact goals, the ability to complete acquisitions and divestitures as planned, the ability to successfully integrate acquired businesses, the ability to attract and retain key employees, the uncertainty of the outcome of legal proceedings, whether or not the Company believes they have merit, and the ability to address uncertain or unfavorable global economic conditions, including inflation, disruptions in the credit markets and tax matters.
The Company defines working capital as the difference between current assets (excluding Cash and cash equivalents and marketable securities, the latter of which is reported in Other current assets) and current liabilities (excluding short-term debt). Investing activities used $742 of cash in 2023 compared to $1,601 during 2022.
The Company defines working capital as the difference between current assets (excluding Cash and cash equivalents and marketable securities, the latter of which is reported in Other current assets) and current liabilities (excluding short-term debt). Investing activities used $534 of cash in 2024 compared to $742 during 2023.
This increase in Gross profit was primarily due to higher pricing and cost savings from the Company’s funding-the-growth initiatives (340 bps), partially offset by significantly higher raw and packaging material costs (740 bps), which included foreign exchange transaction costs.
This increase in Gross profit was due to higher pricing and cost savings from the Company’s funding-the-growth initiatives (290 bps), partially offset by significantly higher raw and packaging material costs (540 bps), which included foreign exchange transaction costs.
We have been negatively affected by changes in the policies and practices of our trade customers in key markets, such as inventory destocking, fulfillment requirements, limitations on access to shelf space, delisting of our products and certain sustainability, supply chain and packaging standards or initiatives.
We have been negatively affected by changes in the policies and practices of our trade customers in key markets, such as inventory destocking, fulfillment requirements, technology-aided category pricing pressures, limitations on access to shelf space, delisting of our products and sustainability, supply chain and packaging standards or initiatives.
Gross profit, Selling, general and administrative expenses, Selling, general and administrative expenses as a percentage of Net sales, Other (income) expense, net, Operating profit, Operating profit margin, Non-service related postretirement costs, effective income tax rate, Net income attributable to Colgate-Palmolive Company and Earnings per share on a diluted basis are discussed in this Annual Report on Form 10-K both on a GAAP basis and excluding, as applicable, charges resulting from the ERISA litigation matter, the foreign tax matter and the 2022 Global Productivity Initiative, product recall costs, goodwill and intangible assets impairment charges, a gain on the sale of land in Asia Pacific and acquisition-related costs.
Gross profit, Gross profit margin, Selling, general and administrative expenses, Selling, general and administrative expenses as a percentage of Net sales, Other (income) expense, net, Operating profit, Operating profit margin, Non-service related postretirement costs, Effective income tax rate, Net income attributable to Colgate-Palmolive Company and Earnings per share on a diluted basis are discussed in this Annual Report on Form 10-K both on a GAAP basis and excluding, as applicable, charges resulting from the ERISA litigation matter, the foreign tax matter and the 2022 Global Productivity Initiative and product recall costs.
All market share references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company competes and purchases data (excluding Venezuela from all periods). Market share data is subject to limitations on the availability of up-to-date information.
All market share references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company competes and purchases data (excluding Venezuela from all periods). 48 (Dollars in Millions Except Per Share Amounts) Market share data is subject to limitations on the availability of up-to-date information.
In addition, total benefit payments expected to be paid from the Company’s assets to participants in unfunded plans are estimated to be approximately $98 for the year ending December 31, 2024.
In addition, total benefit payments expected to be paid from the Company’s assets to participants in unfunded plans are estimated to be approximately $95 for the year ending December 31, 2025.
We do this by developing and selling science-led products globally that make people’s and their pets’ lives healthier and more enjoyable and by embracing our sustainability and social impact and diversity, equity and inclusion (“DE&I”) strategies across our organization. We are tightly focused on two product segments: Oral, Personal and Home Care; and Pet Nutrition.
We do this by developing and selling science-led products globally that make people’s and their pets’ lives healthier and more enjoyable and by embracing our Sustainability & Social Impact Strategy across our organization. We are tightly focused on two product segments: Oral, Personal and Home Care; and Pet Nutrition.
Selling, general and administrative expenses as a percentage of Net sales increased to 36.8% in 2023 from 36.5% in 2022. Excluding charges resulting from the 2022 Global Productivity Initiative, Selling, general and administrative expenses as a percentage of Net sales increased to 36.7% in 2023 from 36.5% in 2022.
Selling, general and administrative expenses as a percentage of Net sales increased to 38.5% in 2024 from 36.8% in 2023. Excluding charges resulting from the 2022 Global Productivity Initiative in both periods, Selling, general and administrative expenses as a percentage of Net sales increased to 38.4% in 2024 from 36.7% in 2023.
See Note 11, Income Taxes, to the Consolidated Financial Statements for additional information. 27 (Dollars in Millions Except Per Share Amounts) During the quarter ended March 31, 2023, we recorded a charge of $267 as a result of a decision of the United States Court of Appeals for the Second Circuit affirming a grant of summary judgment to the plaintiffs in a lawsuit under the Employee Retirement Income Security Act seeking the recalculation of benefits and other relief associated with a 2005 residual annuity amendment to the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Retirement Plan”).
During the quarter ended March 31, 2023, we recorded a charge of $267 as a result of a decision of the United States Court of Appeals for the Second Circuit (the “Second Circuit”) affirming a grant of summary judgment to the plaintiffs in a 27 (Dollars in Millions Except Per Share Amounts) lawsuit under the Employee Retirement Income Security Act (“ERISA”) seeking the recalculation of benefits and other relief associated with a 2005 residual annuity amendment to the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Retirement Plan”).
The Company uses the Black-Scholes-Merton ( “ Black-Scholes ” ) option pricing model to estimate the fair value of stock option awards. The weighted-average estimated fair value of each stock option award granted in the year ended December 31, 2023 was $14.89. The Black-Scholes model uses various assumptions to estimate the fair value of stock option awards.
The Company uses the Black-Scholes-Merton ( “ Black-Scholes ” ) option pricing model to estimate the fair value of stock option awards. The weighted-average estimated fair value of each stock option award granted in the year ended December 31, 2024 was $22.65. The Black-Scholes model uses various assumptions to estimate the fair value of stock option awards.
Such statements may relate, for example, to sales or volume growth, net selling price increases, organic sales growth, profit or profit margin levels, earnings per share levels, financial goals, the impact of foreign exchange, the impact of geopolitical conflicts and tensions, such as the war in Ukraine, the Israel-Hamas war and tensions between China and Taiwan, cost-reduction plans (including the 2022 Global Productivity Initiative), tax rates, interest rates, new product introductions, digital capabilities, commercial investment levels, acquisitions, divestitures, share repurchases or legal or tax proceedings, among other matters.
Such statements may relate, for example, to sales or volume growth, net selling price increases, organic sales growth, profit or profit margin levels, earnings per share levels, financial goals, the impact of foreign exchange, the impact of additional tariffs, the impact of geopolitical conflicts and tensions, such as the war in Ukraine, the conflict in the Middle East and tensions between China and Taiwan, cost-reduction plans, tax rates, interest rates, new product introductions, digital capabilities, commercial investment levels, acquisitions, divestitures, share repurchases or legal or tax proceedings, among other matters.
This agreement, which is known as the Minimum Tax Directive (part of the “Pillar II Model Rules”), was supposed to be transposed into the laws of all EU member states by December 31, 2023. Most member states complied while some were granted extensions of time.
This agreement, which is known as the Minimum Tax Directive (part of the “Pillar II Model 35 (Dollars in Millions Except Per Share Amounts) Rules”), was supposed to be transposed into the laws of all EU member states by December 31, 2023. Most member states complied, while some were granted extensions of time.
This increase in Gross profit was primarily due to higher pricing and cost savings from the Company’s funding-the-growth initiatives (250 bps), which were partially offset by significantly higher raw and packaging material costs (310 bps), which included foreign exchange transaction costs.
This increase in Gross profit was due to cost savings from the Company’s funding-the-growth initiatives (250 bps), higher pricing and favorable mix (30 bps), partially offset by significantly higher raw and packaging material costs (340 bps), which included foreign exchange transaction costs.
The Company reviews external data and its own historical trends for health care costs to determine the medical cost trend rate. The assumed rate of increase for the U.S. postretirement benefit plans is 6.00% for 2024, declining to 4.88% by 2028 and remaining at 4.50% for the years thereafter.
The Company reviews external data and its own historical trends for health care costs to determine the medical cost trend rate. The assumed rate of increase for the U.S. postretirement benefit plans is 7.00% for 2025, declining to 5.00% by 2030 and remaining at 4.50% for the years thereafter.
This increase in Gross profit was primarily due to higher pricing and cost savings from the Company’s funding-the-growth initiatives (310 bps), partially offset by significantly higher raw and packaging material costs (630 bps).
This increase in Gross profit was primarily due to cost savings from the Company’s funding-the-growth initiatives (210 bps), partially offset by lower pricing and higher raw and packaging material costs (50 bps).
This increase in Gross profit was primarily due to cost savings from the Company’s funding-the-growth initiatives (310 bps) and higher pricing, partially offset by significantly higher raw and packaging material costs (430 bps).
This increase in Gross profit was due to cost savings from the Company’s funding-the-growth initiatives (280 bps) and higher pricing, partially offset by higher raw and packaging material costs (110 bps).
The Company believes its strong cash generation and financial position should continue to allow it broad access to global credit and capital markets. Cash Flow Net cash provided by operations increased to $3,745 in 2023 as compared to $2,556 in 2022, primarily due to changes in working capital and higher net income.
The Company believes its strong cash generation and financial position should continue to allow it broad access to global credit and capital markets. Cash Flow Net cash provided by operations increased 10% to $4,107 in 2024 as compared to $3,745 in 2023, primarily due to higher net income, partially offset by changes in working capital.
The discount rate used to measure the benefit obligation for U.S. defined benefit plans was 5.40% and 5.66% as of December 31, 2023 and 2022, respectively. The discount rate used to measure the benefit obligation for other U.S. postretirement plans was 5.37% and 5.67% as of December 31, 2023 and 2022, respectively.
The discount rate used to measure the benefit obligation for U.S. defined benefit plans was 5.73% and 5.40% as of December 31, 2024 and 2023, respectively. The discount rate used to measure the benefit obligation for other U.S. postretirement plans was 5.74% and 5.37% as of December 31, 2024 and 2023, respectively.
We continue to prioritize our investments in high growth segments within our Oral Care, Personal Care and Pet Nutrition businesses. We are also seeking to lead in the development of human capital, and to maximize the impact of our sustainability and social impact and DE&I strategies.
We continue to prioritize our investments in high growth segments within our Oral Care, Personal Care and Pet Nutrition businesses. We also seek to lead in the development of human capital and to maximize the impact of our Sustainability & Social Impact Strategy.
Aggregate repurchases in 2022 consisted of approximately 13.4 million common shares under the 2022 Program, 3.4 million common shares under the 2018 Program and 0.3 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,308.
Aggregate share repurchases in 2024 consisted of approximately 18.3 million common shares under the 2022 Program and 0.4 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,739.
Discount rates used for the U.S. and international defined benefit and other postretirement plans are based on a yield curve constructed from a portfolio of high-quality bonds whose projected cash flows approximate the projected benefit payments of the plans.
Discount rates used for the U.S. and international defined benefit and other postretirement plans are based on a yield curve constructed from a portfolio 55 (Dollars in Millions Except Per Share Amounts) of high-quality bonds whose projected cash flows approximate the projected benefit payments of the plans.
The increase in organic sales in 2023 versus 2022 was due to increases in Oral Care, Personal Care and Home Care organic sales. The increase in Oral Care was primarily due to organic sales growth in the toothpaste and mouthwash categories.
The increase in organic sales in 2024 versus 2023 was due to increases in Oral Care, Home Care and Personal Care organic sales. The increase in Oral Care was primarily due to organic sales growth in the toothpaste and manual toothbrush categories.
In addition, the retail landscape in many of our markets continues to evolve as a result of the continued growth of eCommerce, changing consumer preferences (as consumers increasingly shop online and via mobile and social applications) and the increased presence of alternative retail channels, such as subscription services and direct-to-consumer businesses.
In addition, the retail landscape in many of our markets continues to evolve as a result of the continued growth of eCommerce, changing consumer preferences (as consumers increasingly shop online, including to compare prices and product availability) and the increased presence of alternative retail channels, such as subscription services and direct-to-consumer businesses.
Such inflation and higher interest rates may negatively impact consumer consumption or discretionary spending and/or change their purchasing patterns by foregoing purchasing certain of our products or by switching to “private label” or to our lower-priced product offerings.
Such inflation and developments in trade relations as well as high interest rates may negatively impact consumer consumption or discretionary spending and/or change their purchasing patterns by foregoing purchasing certain of our products or by switching to “private label” or to our lower-priced product offerings.
We continue to closely monitor the impact of geopolitical events and tensions, such as the war in Ukraine, the Israel-Hamas war and tensions between China and Taiwan and the challenging market conditions discussed above on our business and the related uncertainties and risks.
We continue to closely monitor the impact of geopolitical events and tensions, such as the war in Ukraine, the conflict in the Middle East, tensions between China and Taiwan and the developments in trade relations, and the challenging market conditions discussed above, on our business and the related uncertainties and risks.
For additional information regarding the Company’s use of market share data and limitations of such data, see “Market Share Information” below. Net sales for Hill’s Pet Nutrition were $4,290 in 2023, an increase of 15.5% from 2022, driven by volume growth of 5.0% and net selling price increases of 11.0%, partially offset by negative foreign exchange of 0.5%.
For additional information regarding the Company’s use of market share data and limitations of such data, see “Market Share Information” below. Net sales for Hill’s Pet Nutrition were $4,483 in 2024, up 4.5% from 2023, driven by volume growth of 0.8% and net selling price increases of 4.1%, partially offset by negative foreign exchange of 0.4%.
Selling, general and administrative expenses in both periods included charges resulting from the 2022 Global Productivity Initiative. Excluding these charges in both periods, Selling, general and administrative expenses increased to $7,149 in 2023 from $6,560 in 2022, reflecting increased advertising investment of $374 and higher overhead expenses of $215.
Selling, general and administrative expenses in both periods included charges resulting from the 2022 Global Productivity Initiative. Excluding these charges in both periods, Selling, general and administrative expenses increased to $7,723 in 2024 from $7,149 in 2023, reflecting increased advertising investment of $349 and higher overhead expenses of $225.
Additionally, inflation is impacting the broader economy with consumers around the world facing widespread rising prices as well as higher interest rates resulting from measures to address inflation.
Additionally, inflation has impacted the broader economy with consumers around the world facing widespread rising prices as well as high interest rates resulting from measures to address inflation.
Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU improves the transparency of income tax disclosure by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU improves the transparency of income tax disclosure by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction.
Organic sales in Latin America increased 15.5% in 2023. Organic sales growth was led by Argentina, Mexico, Brazil and Colombia. The increase in organic sales in Latin America in 2023 versus 2022 was due to increases in Oral Care, Personal Care and Home Care organic sales.
Organic sales in Latin America increased 16.8% in 2024. Organic sales growth was led by Argentina, Brazil and Mexico. The increase in organic sales in Latin America in 2024 versus 2023 was due to increases in Oral Care, Home Care and Personal Care organic sales.
Operating profit was flat as a percentage of Net sales due to an increase in Gross profit (140 bps) and a decrease in Other (income) expense, net, (20 bps), offset by an increase in Selling, general and administrative expense (160 bps), all as a percentage of Net sales.
This increase in Operating profit as a percentage of Net sales was due to an increase in Gross profit (210 bps) and a decrease in Other (income) expense, net (30 bps), partially offset by an increase in Selling, general and administrative expenses (160 bps), all as a percentage of Net sales.
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements-Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This ASU modified the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations.
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This ASU modified the disclosure and presentation requirements of a variety of codification topics by aligning them with the SEC’s regulations. This guidance is effective for the Company no later than June 30, 2027.
Based on year-end 2023 variable rate debt levels, a 1% increase in interest rates would have increased Interest (income) expense, net by $4 in 2023. 53 (Dollars in Millions Except Per Share Amounts) Commodity Price Risk The Company is exposed to price volatility related to raw materials used in production, such as resins, essential oils, tropical oils, pulp, tallow, corn, poultry and soybeans.
Based on year-end 2024 variable rate debt levels, a 1% increase in interest rates would have increased Interest expense by $3 in 2024. Commodity Price Risk The Company is exposed to price volatility related to raw materials used in production, such as resins, essential oils, tropical oils, pulp, tallow, corn, poultry and soybeans.
Dividend payments in 2023 were $1,749, an increase from $1,691 in 2022. Dividend payments increased to $1.91 per share in 2023 from $1.86 per share in 2022. In the first quarter of 2023, the Company increased the quarterly common stock dividend to $0.48 per share from $0.47 per share, effective in the second quarter of 2023.
Dividend payments in 2024 were $1,789, an increase from $1,749 in 2023. Dividend payments increased to $1.98 per share in 2024 from $1.91 per share in 2023. In the first quarter of 2024, the Company increased the quarterly common stock dividend to $0.50 per share from $0.48 per share, effective in the second quarter of 2024.
In 2023, advertising investment increased as a percentage of Net sales to 12.2% from 11.1% in 2022 and increased by 18.7% in absolute terms to $2,371 as compared with $1,997 in 2022. 2023 2022 Selling, general and administrative expenses, GAAP $ 7,151 $ 6,565 2022 Global Productivity Initiative (2) (5) Selling, general and administrative expenses, non-GAAP $ 7,149 $ 6,560 2023 2022 Basis Point Change Selling, general and administrative expenses as a percentage of Net sales, GAAP 36.8 % 36.5 % 30 2022 Global Productivity Initiative (0.1) % — % Selling, general and administrative expenses as a percentage of Net sales, non-GAAP 36.7 % 36.5 % 20 32 (Dollars in Millions Except Per Share Amounts) Other (Income) Expense, Net Other (income) expense, net was $191 and $69 in 2023 and 2022, respectively.
In 2024, advertising investment increased as a percentage of Net sales to 13.5% from 12.2% in 2023 and increased by 14.7% in absolute terms to $2,720 as compared with $2,371 in 2023. 2024 2023 Selling, general and administrative expenses, GAAP $ 7,729 $ 7,151 2022 Global Productivity Initiative (6) (2) Selling, general and administrative expenses, non-GAAP $ 7,723 $ 7,149 2024 2023 Basis Point Change Selling, general and administrative expenses as a percentage of Net sales, GAAP 38.5 % 36.8 % 170 2022 Global Productivity Initiative (0.1) % (0.1) % Selling, general and administrative expenses as a percentage of Net sales, non-GAAP 38.4 % 36.7 % 170 32 (Dollars in Millions Except Per Share Amounts) Other (Income) Expense, Net Other (income) expense, net was $164 and $191 in 2024 and 2023, respectively.
This guidance was effective for the Company beginning on January 1, 2023 and did not have an impact on the Company’s Consolidated Financial Statements.
The guidance was effective for the Company beginning on January 1, 2024 and did not have a material impact on the Company’s Consolidated Financial Statements.
The Company’s working capital as a percentage of Net sales was (1.4)% in 2023 and 1.0% in 2022. This change in working capital as a percentage of Net sales is primarily due to higher accounts payable and accruals, and lower inventory.
The Company’s working capital as a percentage of Net sales was (5.2)% in 2024 and (1.4)% in 2023. This change in working capital as a percentage of Net sales was primarily due to higher accounts payable and accruals.
A reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measures for the years ended December 31, 2023 and 2022 is presented within the applicable section of Results of Operations. 48 (Dollars in Millions Except Per Share Amounts) The following tables provide a quantitative reconciliation of Net sales growth to organic sales growth for the years ended December 31, 2023 and 2022 versus the prior year: Year ended December 31, 2023 Net Sales Growth (GAAP) Foreign Exchange Impact Acquisitions and Divestments Impact Organic Sales Growth (Non-GAAP) Oral, Personal and Home Care North America 3.0% —% —% 3.0% Latin America 16.5% 1.0% —% 15.5% Europe 7.5% 2.5% —% 5.0% Asia Pacific (1.5)% (4.0)% —% 2.5% Africa/Eurasia —% (17.5)% —% 17.5% Total Oral, Personal and Home Care 6.5% (1.5)% —% 8.0% Pet Nutrition 15.5% (0.5)% 5.5% 10.5% Total Company 8.5% (1.0)% 1.0% 8.5% Year ended December 31, 2022 Net Sales Growth (GAAP) Foreign Exchange Impact Acquisitions and Divestments Impact Organic Sales Growth (Non-GAAP) Oral, Personal and Home Care North America 3.5% —% —% 3.5% Latin America 8.5% (2.0)% —% 10.5% Europe (10.5)% (10.5)% —% —% Asia Pacific (1.5)% (6.5)% —% 5.0% Africa/Eurasia 3.5% (8.5)% —% 12.0% Total Oral, Personal and Home Care 1.0% (4.5)% —% 5.5% Pet Nutrition 12.0% (3.5)% 2.5% 13.0% Total Company 3.0% (4.5)% 0.5% 7.0% Market Share Information Management uses market share information as a key indicator to monitor business health and performance.
A reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measures for the years ended December 31, 2024 and 2023 is presented within the applicable section of Results of Operations. 47 (Dollars in Millions Except Per Share Amounts) The following tables provide a quantitative reconciliation of Net sales growth to organic sales growth for the years ended December 31, 2024 and 2023 versus the prior year: Year ended December 31, 2024 Net Sales Growth (GAAP) Foreign Exchange Impact Acquisitions and Divestments Impact Organic Sales Growth (Non-GAAP) Oral, Personal and Home Care North America (1) 0.5% (0.1)% —% 0.7% Latin America 3.1% (13.7)% —% 16.8% Europe (1) 7.7% 1.1% —% 6.7% Asia Pacific 2.7% (1.3)% —% 4.0% Africa/Eurasia 1.2% (12.1)% —% 13.3% Total Oral, Personal and Home Care 3.0% (5.2)% —% 8.1% Pet Nutrition 4.5% (0.4)% —% 4.9% Total Company 3.3% (4.1)% —% 7.4% Note: Table may not sum due to rounding.
The current year impact of these changes is included in the Company’s full year effective income tax rate. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted, which among other things, implements a 15% minimum tax on book income of certain large corporations effective for years beginning after December 31, 2022.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted, which among other things, implements a 15% minimum tax on book income of certain large corporations effective for years beginning after December 31, 2022.
This increase in Operating profit as a percentage of Net sales was primarily due to an increase in Gross profit (120 bps) and a decrease in Selling, general and administrative expenses (50 bps), both as a percentage of Net sales.
This increase in Operating profit as a percentage of Net sales was primarily due to an increase in Gross profit (220 bps), partially offset by an increase in Selling, general and administrative expenses (100 bps), both as a percentage of Net sales.
Aggregate share repurchases in 2023 consisted of approximately 14.7 million common shares under the 2022 Program and 0.3 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,128.
Aggregate repurchases in 2023 consisted of approximately 14.7 million common shares under the 2022 Program and 0.3 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,128. Share repurchases, net of proceeds from exercise of stock options, were $1,101 and $748 in 2024 and 2023, respectively.

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